Info-tech

Infosys Q3 net rises 16.6 per cent to ₹ 5,197 crore

Our Bureau. New Delhi | Updated on January 13, 2021

Salil Parekh, CEO and Managing Director, Infosys. Photo: G.R.N. Somashekar   -  BUSINESS LINE

Large deal wins and improving demand around digital transformation helped net profit rise

Infosys posted yet another stellar performance with its net profit rising  16.6 per cent to ₹5,197 crore in the third quarter of FY21 on the back of large deal wins and improving demand environment around digital transformation.

“Execution of client-relevant strategy focussed on digital transformation continues to drive superior growth, well ahead of the industry,” said Salil Parekh, CEO and MD.

 

The biggest deal

He also said  the company signed the biggest deal in the history of the Indian IT sector during the quarter which is learnt to be with Daimler and  estimated at $3.2 billion spread over eight years.

Large deal TCV (total contract value) was at an all-time high of $7.13 billion with 73 per cent being net new. The IT major for the second straight quarter raised the guidance for revenue and operating margin. The company expects its revenue to grow 4.5-5 per cent in the financial year ending March 2021 compared with 2-3 per cent growth forecast earlier. It has raised its operating margin guidance to 24-24.5 per cent compared with the earlier  23-24 per cent.

On a year-on-year basis, revenues grew 12.3 per cent to ₹25,927 crore and on a sequential basis were up 5.5 per cent. The net profit on a sequential basis rose  7.3 per cent. It also posted its highest Q3 sequential growth of 5.3 per cent  in eight years in constant currency.

The company said it will hire 24,000 more from campus while the voluntary attrition rate for IT services declined to 10 per cent during the quarter from 15.8 per cent. The cash flow during the quarter was ₹5,683 crore achieving a y-o-y  growth of 19.4 per cent.

 

Hybrid model

Infosys COO UB Pravin Rao also said that going forward Infosys will adopt a hybrid model of work-from-home and office. “We have to wait and watch on real estate rationalisation. We are not renewing many offices on rent. We have slowed down on infrastructure expansion,” he said.

Sanjeev Hota, head of research at Sharekhan, said the strong Q3 results, robust deal wins and healthy digital growth momentum would drive consensus earning upgrade. and re-rating of target multiple. “Infosys reported another solid quarter beating the revenue and margin performance, along with record-high deal wins ever.”

Infosys shares closed at ₹1,387.70 rising 1.16 per cent on the BSE on Wednesday.

 

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Published on January 13, 2021
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