IT company Infosys on Friday posted a nearly 30 percent drop in net profit at Rs 3,609 crore for the third quarter, well below market expectations.

These are some of the big takeaways from the December quarter earnings.

Good news: Infosys has announces buy back of shares under the open market route of Rs 8,260 crore at a maximum price of Rs 800 a share. Revenue growth was strong and the revision of guidance is a big positive.

Bad news: The sharp contraction in margins is a bummer. Operating profit declined by 1.3 percent quarter on quarter. The decline in profit after tax was due to additional depreciation and amortisation expenses of Rs 88 crore for the two units — Panaya and Skava — it purchased under the watch of former CEO Vishal Sikka. The company has revised the 2018-19 guidance in constant currency terms from 6-8 percent to 8.5-9 percent.

Ups and downs: Revenues from North America and Europe were up 2.6 percent and 3.8 percent, respectively. Revenues from the Banking, Financial Services and Insurance vertical rose 3.6 percent but retail was down 0.1 percent.

Margins: Margins were at 22.6 percent compared with 23.7 percent. The operating margin included an investment trajectory in sales, agile digital and reskilling, and initial impact of acquisitions. The margin guidance for FY19 has been maintained at 22-24 percent.

Deals: Deals worth $1.5 billion were signed in the third quarter compared with $2 billion in the second quarter.

Digital Play: Infosys’ digital play got a boost as revenues from this segment grew 33.1 percent from a year ago in constant currency terms. Revenues increased 5 percent from the previous quarter. Digital revenues at $942 million now comprise 31.5 percent of total revenue.

First Published:Jan 11, 2019 7:09 PM IST