Infosys reported strong numbers for the December quarter last week. The sequential dollar revenue growth was 0.6 per cent against TCS’ negative 0.3 per cent. The market expected a 0.8 per cent fall in dollar revenues. Giving a thumbs-up to the company’s performance, the stock was marked up sharply, helping it move to a premium (19.7 times its likely earnings of FY16) vis-a-vis the stock of TCS (18.7 times). Improved traction in financial services and the energy verticals, that together account for 53 per cent of revenues, helped Infosys. The financial services segment grew 3.1 per cent sequentially in constant currency terms against a muted 0.7 per cent growth for TCS. Infosys had four large deal wins during the quarter with a total contract value of $360 million.
The company was able to keep margin contraction at 60 basis points despite 2.5 per cent drop (sequential) in realisations. Weaker rupee, good volume growth and increased adoption of automation helped.