IT major Infosys has reported an 11.1 per cent year-on-year (YoY) rise in net profit at ₹6,021 crore for the quarter ended September 30, exceeding street expectations. On a sequential basis, the profits rose 12.3 per cent from ₹5,360 crore in the last quarter.
Infosys Q2 Fact Sheet Fiscal 23
Revenue from operations stood at ₹36,538 crore, a 23.4 per cent increase YoY. On a quarter-on-quarter (QoQ) basis, the revenues increased by 5.9 per cent from ₹34,470 crore, last quarter. In constant currency terms, its revenue rose by 18.8 per cent YoY and 4 per cent QoQ. Digital comprised 61.8 per cent of overall revenues and grew at 31.2 per cent in constant currency.
The guidance for the year, however, has been narrowed as the management is seeing ‘some caution’ in the market amidst possible slowdown in western economies. The FY23 revenue guidance is revised to 15-16 per cent from 14-16 per cent. The operating margin guidance is also revised to 21-22 per cent from 21-23 per cent.
Salil Parekh, CEO and MD, said, “We have had strong momentum and seen good traction, but we also see some caution in high-tech and in telecom in addition with some caution that we were already seeing in financial services and retail on the discretionary part of our deals pipeline.”
“Considering the positive and the global macro factors, we have narrowed our guidance at the higher end of the band,” he added.
Operating margins up
Thanks to the cross-currency impact and cost optimisation, the operating margin for the quarter increased by 140 bps sequentially at 21.5 per cent. Nilanjan Roy, Chief Financial Officer, said, ““Operating margins in Q2 expanded sequentially, helped by our operational rigor. While supply-side challenges are gradually abating as reflected in the reducing attrition rates, they continue to exert pressure on our cost structure.”
Infosys also said the cloud revenues for the quarter was larger than $1 billion, bought on by “strength of cloud services and Cobalt capability.”
The deal wins for the quarter stood at $2.7 billion in contrast with $1.7 billion in the last quarter. This is highest in last seven quarters, the company said. Attrition saw moderation as well. The attrition rate for Q2 was 27.1 per cent in contrast with 28.4 per cent in the last quarter.
Infosys board has also announced a share buyback of equity shares from the open market route amounting to ₹9,300 crore. It has fixed the price at a premium of ₹1,850 per share. Additionally, the board has also approved interim dividend of ₹16.50 per share. The total amount of dividend will be approximately ₹6,940 crore, it said.
Mitul Shah - Head of Research at Reliance Securities, said, “Infosys reported a strong 2QFY23 performance. Margins were above our expectations. Moreover, management raised its FY23 revenue growth guidance range, bit narrowing down the range and revised its EBIT margin guidance to 21-22 per cent, indicating better performance during the balance of 2H of FY23.”