Infosys Q2 net rises 11.7% on large deal wins

Our Bureau Bengaluru | Updated on October 13, 2021

Company benefits from higher contribution from the Daimler deal

Infosys came up with another quarter of stellar results, with the IT major posting a 11.7 per cent increase in net profit to ₹5,428 crore in the second quarter over the same period last year, beating street estimates.

The company also raised its growth forecast for FY22 to 16.5-17.5 per cent, on the back of large deal wins and increased spending by clients.

Daimler deal

The company benefited from higher contribution from the Daimler deal, increased adoption of digital transformation by clients.

The company’s CEO and MD, Salil Parekh, told an earnings press conference on Wednesday that Infosys will soon announce a new organisational structure with the current chief operating officer, UB Pravin Rao, set to retire in December this year.

The major cause of concern, however, was an increase in the attrition rate to 20.1 per cent from 13.9 per cent. The company has already given substantial hikes during January and July, while promotions were being given to high-performance employees. “To harness the full potential of the market opportunity, we are expanding our college graduates hiring programme to 45,000 for the year from 35,000 in the current year,” said Pravin Rao. As far as lateral hires are concerned, those with digital skills are being preferred, and around 80 per cent of incremental demand from digital has come from reskilling of existing employees.

Nearly 1 million graduates join the IT industry every year. The company had to incur more costs to retain talent with the employee cost growing by 3.4 per cent sequentially and by 17.5 per cent on a y-o-y basis.

Parekh said the pipeline for large deals has been very strong. The company won 22 deals worth $2.15 billion in the July-September period, compared with $2.6 billion in the previous quarter.

Revenues rise

Infosys’ revenues for the quarter rose 20.5 per cent to ₹29,602 crore on a year-on-year basis. Revenues in constant currency terms grew by 19.4 per cent y-o-y and 6.3 per cent q-o-q. Digital revenues grew to 56.1 per cent of total revenues, while the operating margin was at 23.6 per cent, posting a decline of 1.8 per cent due to supply-side headwinds.

IT portal

Parekh said there has been steady progress on the IT system. More than 1.9 crore returns have been filed as of yesterday using the new system.

More than 18 crore logins have been observed on the portal. Over 3.8 unique users have successfully completed various transactions. From the previous assessment year, 96 per cent of the returns have been processed and from the current year 1 crore has been processed. To ensure a smooth filing, Infosys has continuously engaged over 12,000 individual taxpayers and CAs. About 2-3 lakh IT returns are being filed each day.

Published on October 13, 2021

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