What is your quick take on the Infosys Q3 results for the Dec-20 quarter?

Infosys reported a sharp increase in Q3 PAT by 16.77% yoy at Rs.5,215 crore. In fact, the company did better on a yoy and on sequential basis and much better than street expectations. Revenues were up 12.28% in Dec-20 quarter at Rs.25,927 crore and this traction was visible across verticals with digital business growing its share substantially.

In fact, the digital business grew from 40% of total revenues last year to 50% of total revenues in the Dec-20 quarter. If you look at the operating profits for the quarter, they were up 30.11% at Rs.6,589 crore. This led to expansion in the operating profit margins from 21.93% last year to 25.41% in Dec-20 quarter, closing its margin gap with TCS.

This also had an impact on the bottom line and the PAT was up by 16.77% at Rs.5,215 crore. The contribution to the bottom line came from top line growth across verticals and also from improvement in operating margins. The company management confirmed that Infosys had signed $7.13 billion worth of large deals during the said quarter.

Even as digital grew by 31.3% on a yoy basis and now accounts for 50% of total revenues, the growth was visible across most of the key practices of Infosys. For example, there was growth in market share of BFSI, Hi-Tech and life sciences. At the same time, there was all in market share for retail, energy, communication and manufacturing which faced pressure.

Client additions were robust across North America and Europe, which account for 86% of revenues of Infosys. In fact, Infy added 139 new clients in the quarter which is much higher than previous quarters, of which a total of 761 clients were actually million dollar clients. The share of repeat business fell from 97% to 95% in the quarter. Overall a great quarter.