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Software services giant Infosys brought the curtains down on FY21, terming it as an exceptional year for the company on the back of large deal wins and the pandemic-induced digital acceleration among its clients.
On a year-on-year basis, the IT giant posted a 17.5 per cent increase in net profit to ₹5,076 crore while revenues grew 13 per cent to ₹26,311 crore. On a quarter-on-quarter basis, however, it failed to beat analyst expectations by reporting a decline of 2.3 per cent in net profit for the fourth quarter of FY21. Revenues for the same period were higher by 1.5 per cent. During FY21, Infosys won its largest-ever deal worth about $3 billion from Daimler for a technology-driven IT infrastructure transformation.
Buyback via open route
The company also announced a capital return of ₹15,600 crore, including a final dividend of ₹6,400 crore and an open market buyback of shares of ₹9,200 crore at ₹1,750 per share. This is as per the capital return policy of the company which had mandated that 85 per cent of the cash will be returned to the shareholders over a five-year period. With this current buyback option, Infosys would be able to return to shareholders 83 per cent of the 85 per cent cash. The company’s board also approved a final dividend of ₹15 per share.
The company also retained the guidance for FY22 with the revenue expected to grow 12-14 per cent in constant currency and the operating margin 22-24 per cent. “Our focus on client relevance, growing our digital portfolio with differentiated capabilities like Infosys CobaltTM, and empowering employees have helped us emerge as a preferred ‘partner-of-choice for our global clients. Our record large deal wins stand testimony to the effectiveness of this approach”, said Salil Parekh, CEO and MD.
Big deal wins
Infosys posted an all-time high deal win for FY21 of $14.1 billion with 66 per cent being net new wins. The deal wins during the fourth quarter were $2.1 billion. For the previous year, the deal wins were $9 billion with 30 per cent being net new additions. The margin for the quarter contracted 90 basis points on a quarter on quarter basis to 24.5 per cent. Operating expenses increased 5.7 per cent Q-Q to ₹2,707 crore in Q4Fy21.
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