Infosys reported 20.2% growth in revenues at Rs38,318 crore for Q3FY23. Net profits for Q3FY23 were up 13.4% at Rs6,586 crore. In terms of guidance, Infosys has guided revenue growth of 16.0%-16.5% and OPM in the range of 21%-22%. For the quarter, constant currency revenue growth was 13.7%. There was growth across its digital and core businesses. For Q3, the total contract value (TCV) stood at $3.3 billion. For the third quarter, the attrition rate stood at 24.3%, lower than the 25.5% reported in year ago period.
The index of industrial production (IIP) bounced back sharply to 7.1% for November 2022, compared to contraction of -4% in October 2022. This pegged the IIP growth at a 5-month high giving the much needed comfort to the government on the growth front. This will also allow the RBI the leeway to pause on rates in its February meeting. The IIP growth was largely due to favourable base effect. For November 2022, mining sector grew at 9.7% while manufacturing grew at 6.1% and electricity at a healthy rate of 12.7%.
CPI inflation or retail inflation for December 2022 came in lower at 5.72% compared to 5.88% in November 2022. Food inflation fell to 4.19% driven by -15.08% contraction in vegetables and a sharp fall in fruits inflation. However, the high protein products continued to report higher inflation and these included meat, eggs, cereals, milk and pulses. However, the concern was that core inflation (excluding food and fuel) remained elevated above the 6% mark. RBI has hinted that it is not done with rate hikes as of now.
HCL Technologies reported revenue growth of 19.6% for Q3FY23 at Rs26,700 crore with 8.2% growth on a sequential basis. EBIT margins narrowed by 50 bps to 18.0% for the quarter despite the EBIT rising 22.8% and the PAT also rising 19% yoy. Revenues were up 13.1% in constant currency terms yoy. The services business of HCL Tech led the growth. In Q3FY23, HCL Tech added 2,945 employees as closing headcount stood at 222,270. HCL Tech bagged 17 large deals in Q3FY23, but the attrition rate for Q3FY23 was 21.7%.
For the month of December 2022, the US inflation fell sharply to 6.5%, which is the lowest level of US inflation since October 2021. Core inflation in the US also stood elevated at 5.7%, although below the 6% mark, where it had been stuck for some time. Fed is expected to raise interest rates by 25 bps on 3 more occasions in the first half of the 2023. Fed members are of the view that the impact of higher rates has already been factored into inflation. For inflation to fall from here, labour market will have to cool down.
According to a report by ICRA, the total borrowings of the centre would be close to Rs14.8 trillion in Fiscal year 2023-24. This would be despite the fiscal deficit being pegged lower at 5.8% for FY24. The additional borrowings will be needed to meet higher redemptions. Total borrowings are expected at Rs14.8 trillion for the centre and Rs24.4 trillion for the states combined. The government will focus on sustaining the domestic growth momentum in the light of the weak global cues. Capex is pegged for FY24 at Rs9 trillion.
It was a tough day for the digital players with stocks like Nykaa and Paytm falling by nearly 9% on the back of some big selling in these counters. Paytm saw some heavy selling by early shareholder, Softbank. The stock of Nykaa has been hammered after it announced a bonus which literally blocked out IPO investors from selling without incurring a huge capital loss. Both the stock are now well below their issue prices. The buyers in these counters were largely domestic mutual funds and the Canadian Pension Fund (CPPIB).
The latest household saving data is not encouraging. Net financial savings of households in India fell to 4% of GDP, the lowest level in 30 years. In FY22, these savings had stood at 7.3% of GDP. This can be attributed to an increase in consumption and an outcome of persistently higher inflation. In fact, net household savings stock has fallen from Rs17.2 trillion last year to just Rs5.2 trillion this year. On the flip side, the liabilities of households increased to 5% of GDP, so consumption could be impacted in next few quarters.
