Infosys Q4 FY16 earnings: Net profit up by 3.9% qoq

The net profit for the quarter stood at Rs. 3,600 crore as against Rs. 3,465 crore qoq. The IT firm registered a net revenue of Rs. 16,550 crore in Q4 as compared to Rs. 15,902 core in Q3 FY16. 

Infosys Ltd announced its results for the fourth quarter and financial year ended March 31, 2016 on April 15, 2016.

The net profit for the quarter stood at Rs. 3,600  crore as against Rs. 3,465 crore qoq. The IT firm registered a net revenue of Rs. 16,550 crore in Q4 as compared to Rs. 15,902 core in Q3 FY16.

The Consolidated EBIT Margin stood at 25.5% in Q4 as compared to 24.9% in Q3. 

“I am proud of our company’s achievements in my first fiscal year as CEO of Infosys. At the same time, I am humbled by the task that is still in front of us. We started the year just two quarters into a strategy to completely

reimagine the notion of services and to transform Infosys. Over the course of this year, we saw this strategy, of bringing automation and innovation to our clients, on a foundation of learning and education, start to show results in the organic growth of our client relationships, in our win rates in large deals, and in the types of projects we are seeing in strategic areas where we never participated before. I am proud of what our teams have achieved this quarter and in the year," said Dr. Vishal Sikka, CEO of Infosys. "And yet despite these heartening results,they are still based on metrics of the past, of the way the industry has been. The world of our future looks entirely different – it is a world that is being fundamentally reshaped by digital technologies, and it is our endeavor to create great value for every business through solutions built on our AI technology and open, cloud platforms, to have Infoscions amplified by intelligent technology, to bring purposeful innovation to life, and in that sense, we are still very much at the beginning of this journey.”

The Company announced that Mr. Mohit Joshi, Ravi Kumar S and Mr. Sandeep Dadlani have been appointed as Presidents of the company effective immediately. 

Business Highlights

This quarter we made significant advances in our strategy to deliver automation and innovation through our traditional and new service offerings, our platforms and tools, and through investments in the broader ecosystem – enabling us to create more depth in existing client relationships, win more deals and specifically large deals, and open up entirely new types of strategic projects for Infosys. 

IIFL had estimated the IT bellwether to rake in a net revenue of Rs.16,602 crore while net profit was expected at Rs. 3,555 crore. The operating profit margin (OPM) was estimated to be at 27.7%, with a rise of 50 bps qoq. However, at on a yoy basis, IIFL estimated OPM to drop by 11 bps. 

Bharti Airtel rises 3%; leapfrogs others to become a pan-India 4G provider

The company's acquisition of Aircel's 4G airwaves has made India's No. 1 telco, a pan-India 4G player even before the Mukesh Ambani-owned Reliance Jio launches commercially. 

Bharti Airtel jumped 3% to Rs. 360.20. The company's acquisition of Aircel's 4G airwaves has made India's No. 1 telco, a pan-India 4G player even before the Mukesh Ambani-owned Reliance Jio launches commercially.

Moreover, Bharti Airtel, has added the maximum number of subscribers to its account in March 2016. With the addition of 25.5 lakh subscribers, the top telco’s grand total of subscribers now stands at 251.24 million.

The scrip opened at Rs. 350 and has touched a high and low of Rs. 364.3 and Rs. 350 respectively. So far 1425783(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 139729.12 crore.

The BSE group 'A' stock of face value Rs. 5 has touched a 52 week high of Rs. 452.45 on 21-Jul-2015 and a 52 week low of Rs. 282.3 on 29-Jan-2016. Last one week high and low of the scrip stood at Rs. 352.4 and Rs. 325.7 respectively.

The promoters holding in the company stood at 65.62 % while Institutions and Non-Institutions held 25.4 % and 8.93 % respectively.

The stock is currently trading above its 200 DMA.

Mphasis drops 1%; sets open offer price at Rs.457.54 per share

Mphasis has set its open offer price to public shareholders at Rs.457.54 per share. 

Mphasis dropped 1% to Rs. 485. Mphasis has set its open offer price to public shareholders at Rs.457.54 per share.

In a filing to the BSE, the company said, "JM Financial Institutional Securities Limited has submitted to BSE a copy of detailed public statement, in respect of the Open Offer to the Public Shareholders of Mphasis Ltd, in compliance with Regulations 3(1) and 4 read with Regulations 13(4) and 15(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and subsequent amendments thereto (“SEBI (SAST) Regulations”), pursuant to the public announcement in relation to this Offer dated 4 April 2016 (“PA”)."

The scrip opened at Rs. 490.3 and has touched a high and low of Rs. 493.15 and Rs. 485 respectively. So far 63846(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 10301.1 crore.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 534 on 29-Oct-2015 and a 52 week low of Rs. 362.5 on 03-Jun-2015. Last one week high and low of the scrip stood at Rs. 502.1 and Rs. 451.25 respectively.

The promoters holding in the company stood at 60.48 % while Institutions and Non-Institutions held 32.13 % and 7.23 % respectively.

The stock is currently trading above its 100 DMA.

Axis Bank shines 1.8%; cuts 1 year MCLR by 15 bps to 9.35%

The bank has also reduced the base rate by 5 bps to 9.45 per cent per annum from the existing 9.50 per cent effective from April 18, 2016.

Axis Bank gained 1.8% and is trading at Rs.411.20 on BSE. The bank has reduced its marginal cost of funds based lending rate (MCLR) by 15 basis points (bps) across all tenors. This follows the reduction in policy rates by RBI on April 05, 2016. The reduced MCLRs will be effective from April 18, 2016. Further, the bank has also reduced the base rate by 5 bps to 9.45 per cent per annum from existing 9.50 per cent effective from April 18, 2016.

The scrip opened at Rs. 439 and has touched a high and low of Rs. 442.7 and Rs. 438.35 respectively. So far 1811167(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 103332.09 crore.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 613.4 on 16-Jul-2015 and a 52 week low of Rs. 366.65 on 18-Jan-2016. Last one week high and low of the scrip stood at Rs. 436.45 and Rs. 417.55 respectively.

The promoters holding in the company stood at 29.91 % while Institutions and Non-Institutions held 56.5 % and 10.04 % respectively.

The stock is currently trading above its 200 DMA.

Wipro climbs 2.8%; to consider buyback of equity shares

Wipro, in a filling to the BSE, said that the Board of Directors will consider a proposal for buyback of equity shares of the company on April 20, 2016. Wipro will announce its Q4 FY16 and full financial year results on April 20, 2016. 

Wipro climbed 2.8% to Rs. 584.45 on Wednesday. The company, in a filling to the BSE, said that the Board of Directors will consider a proposal for buyback of equity shares of the company on April 20, 2016. Wipro will announce its Q4 FY16 and full financial year results on April 20, 2016.

The scrip opened at Rs. 583.75 and has touched a high and low of Rs. 591.95 and Rs. 582.3 respectively. So far 678534(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 140383.89 crore.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 624.4 on 13-Apr-2015 and a 52 week low of Rs. 508.9 on 29-Feb-2016. Last one week high and low of the scrip stood at Rs. 570.05 and Rs. 542.1 respectively.

The promoters holding in the company stood at 73.35 % while Institutions and Non-Institutions held 15.52 % and 10.53 % respectively.

The stock is currently trading above its 200 DMA.

Crude Oil: Perception v/s Reality

The resurgence is attributed to production freeze by OPEC at January levels, wherein major producers concurred on the decision, while Iran was provided a special exemption to expand the output, considering that the Islamic Republic has just got the monkey of its back (free from economic sanctions).

Perception
Oil prices have witnessed handsome recovery, with WTI rebounding from the lows of US$26.5/bbl during February and now trading above US$40/bbl. The resurgence is attributed to production freeze by OPEC at January levels, wherein major producers concurred on the decision, while Iran was provided a special exemption to expand the output, considering that the Islamic Republic has just got the monkey of its back (free from economic sanctions). Markets are deriving courage from the fact that major oil producers are willing to stem the fall in oil prices. There is a perception that OPEC will move away from the laissez fare policy and will be no more a passive onlooker, if selling resurfaces in oil markets.
 
Reality
A freeze on the OPEC output does not translate in to anything, as it fails to mitigate the prevalent global surplus. The reality remains that oil markets were oversupplied and will remain in a surplus for quite some time to come. For instance, global oil markets were in a surplus of 2.2mbpd during 2015 and 3.1mbpd during the first 2 months of 2016. In the first three months of 2016, OPEC has produced around 33mbpd, which is substantially higher than the cartel’s production quota of 31.5mbpd.

Source: Bloomberg, India Infoline Research
 
Perplexing signals
The focus is now shifting towards April 17th talks in Doha, wherein 17 oil producers are expected to participate. Market participants are looking forward to the possibility of another announcement of production freeze. However, Saudi Arabia officials have stated that they will freeze production only if Iran and other major producers do so. In such case, April 17th meeting of various oil producers can prove futile as Iran has clearly expressed that they will not freeze output levels unless they attain production of 4mbpd, a substantial upside from the March level of 3.2mbpd. If the meeting yields no concrete agreement on freezing output, we can witness another rout in oil prices. Nevertheless, Kuwait has tried to soothe concerns by ascertaining that the freeze proposal will materialize during April 17th meeting even without the participation of Iran. This is in contrast with Saudi’s stance.

Source: Bloomberg, India Infoline Research
 
Russian oil output inversely correlated to Ruble
On the non-OPEC front, although Russia is considering a number of options to co-operate with OPEC as far as price stability is concerned, its crude production is reported to have hit record highs during March. Russian output levels have constantly remained above 11mbpd during past nine months. Steep depreciation in the Ruble seem to have helped the oil producers, as weaker domestic unit ensures higher realization for the exports in spite of falling prices in international markets. As a matter of fact, Russia has no other option but to produce more oil in order to generate revenues in order to finance country’s fiscal budget which is predominantly dependent on the oil industry.

Source: Bloomberg, India Infoline Research
 
US high inventory levels counterbalancing decline in output
US production during March has moderated to an average of 9.05mbpd, when compared with the peak of 9.7mbpd during last year. Rig counts (as measured by Baker Hughes) have fallen off a cliff, from 1550 in 2014 to the current level of 350. Looking forward, projections call for further decline in US output levels due to sharp cutbacks in investment spending. However, high inventory levels in US remain at gigantic levels (more than 80 year high), which in a way is compensating for the decline in output.

Source: Bloomberg, India Infoline Research
 
Outlook
We infer that Saudis will soften their stance as they cannot afford to witness another rout in oil markets, given the deterioration in their fiscal health and slowing global demand scenario. Consequently, Riyadh will move away from the obsession of gaining market share and concur on the production freeze even without the participation of Iran. However, we do not rule out the probability of weakness re-emerging in event of a failed outcome of April 17th meeting. Having said that, oil prices can lose ground but we do not buy the opinion that it will re-visit 2016 lows. For a sustainable and a substantial recovery in oil prices, markets need concrete supply side response, including curtailment in output. In this respect, we sense that OPEC will eventually taper its production during the second half of this year, as the cartel will have to concede to the fragile global economic backdrop. On price front, we expect WTI crude to trade within US$32–45/bbl range over the course of April and May and then gradually shift its range towards US$50-60/bbl post June.

Cipla completes allocation of shares to FIL Capital Investments

The board of directors of Cipla Health Limited, a subsidiary of the Company has allotted shares to FIL Capital Investments (Mauritius) II Limited and consequently, the transaction has now been completed. 

Cipla Ltd has now informed BSE that the board of directors of Cipla Health Limited, a subsidiary of the Company has allotted shares to FIL Capital Investments (Mauritius) II Limited and consequently, the transaction has now been completed.

Stock view:

Cipla Ltd ended at Rs. 503, up by Rs. 0.4 or 0.08% from its previous closing of Rs. 502.6 on the BSE.

The scrip opened at Rs. 503 and touched a high and low of Rs. 509 and Rs. 501 respectively. A total of 3758202(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 40410.23 crore.

The BSE group 'A' stock of face value Rs. 2 touched a 52 week high of Rs. 748 on 17-Aug-2015 and a 52 week low of Rs. 495.2 on 29-Mar-2016. Last one week high and low of the scrip stood at Rs. 513.05 and Rs. 497.5 respectively.

The promoters holding in the company stood at 36.79 % while Institutions and Non-Institutions held 34.79 % and 26.33 % respectively.

The stock traded below its 200 DMA.

Sanghvi Forging & Engineering bags order worth Rs.12 crore

Sanghvi Forging & Engineering Ltd has announced that the company has bagged an order worth Rs. 12 crore. The new orders are essentially from the oil and gas and power sectors.

Sanghvi Forging & Engineering Ltd has announced that the company has bagged an order worth Rs. 12 crore.

Notably, fresh orders have come in from the oil and gas and power sectors.

The scrip opened at Rs. 44 and has touched a high and low of Rs. 44 and Rs. 41.45 respectively. So far 2523(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 61.36 crore.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 76 on 15-Apr-2015 and a 52 week low of Rs. 37.1 on 21-Mar-2016. Last one week high and low of the scrip stood at Rs. 44 and Rs. 40.55 respectively.

The promoters holding in the company stood at 67.73 % while Institutions and Non-Institutions held 0 % and 32.27 % respectively.

The stock is currently trading below its 200 DMA.

Shilpa Medicare climbs 11%

The company received GMP compliance certificate for two API sites (Unit-1: Deosugur Industrial Area, Deosugur-584170, Raichur, Karnataka, India; Unit-2: Plot nos. 33, 33A, 40 to 47, Raichur Industrial growth Centre, Wadloor Road, Chicksugur-584134, Raichur, Karnataka, India) from PMDA-Japan. 

Shilpa Medicare Ltd was higher by 11% at Rs. 485. The company received GMP compliance certificate for two API sites (Unit-1: Deosugur Industrial Area, Deosugur-584170, Raichur, Karnataka, India; Unit-2: Plot nos. 33, 33A, 40 to 47, Raichur Industrial growth Centre, Wadloor Road, Chicksugur-584134, Raichur, Karnataka, India) from PMDA-Japan.

The scrip opened at Rs. 480 and has touched a high and low of Rs. 503.65 and Rs. 475 respectively. So far 232626(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 3373.21 crore.

The BSE group 'B' stock of face value Rs. 1 has touched a 52 week high of Rs. 623.35 on 05-Aug-2015 and a 52 week low of Rs. 355 on 20-Jan-2016. Last one week high and low of the scrip stood at Rs. 445 and Rs. 425.55 respectively.

The promoters holding in the company stood at 53.05 % while Institutions and Non-Institutions held 23.36 % and 23.59 % respectively.

The stock is currently trading above its 200 DMA.

RIL invites bids to develop deepwater oil & gas blocks

Development programmes for the KG-D6 and NEC blocks were kept on hold, pending clarity from the Centre on the gas price, says the financial newspaper. RIL currently has four oil & gas blocks

Reliance Industries Ltd (RIL) on Tuesday floated an Expression of Interest (EoI) to develop its oil and gas blocks, including some of the discoveries in the KG-D6 block off the coast of Andhra Pradesh, reports a business daily.

Development programmes for the KG-D6 and NEC blocks were kept on hold, pending clarity from the Centre on the gas price, says the financial newspaper. RIL currently has four oil & gas blocks.

RIL is eligible to a higher price for natural gas produced from these discoveries under the new norms if it withdraws arbitration proceedings against the Government, according to the daily.  

The EoI includes contracts for conceptual engineering/front-end engineering and design, and other works for blocks under the New Exploration & Licensing Policy (NELP), says the paper.

A company executive has been quoted as saying that based on the bids, RIL would give a revised field development plan to the Government. 

RIL is also looking to place engineering, procurement, installation and commissioning contract for sub-sea facilities and pipelines for deepwater field development and offshore platform modification work. 

For KG-D6, RIL has invited an EoI for all operation and maintenance services, equipment and materials.