A near 32 per cent spike in other expenses and a 16 per cent rise in the cost of software packages in the quarter ended March 31, 2020 saw Infosys’ consolidated net profit fall 3 per cent quarter-on-quarter to ₹4,335 crore. Revenues rose just by 0.8 per cent to ₹23,267 crore as almost all its segments saw a sequential fall in revenues.

In dollar terms, the quarter ended March 31, 2020 saw revenues fall 1.4 per cent sequentially. EBIT margins came in at 21.1 per cent, at the lower end of the guided range.

In 2019-20, the company recorded consolidated net profit at ₹16,639 core (up 8 per cent YoY) and revenue at ₹90,791 crore (up 9.7 per cent YoY). Infosys posted revenue of $12.8 billion, which shows a growth of 9.8 per cent in constant currency terms.This comes under the company’s guided range of 10-10.5 per cent for the financial year. The margins for the full year came in at 21.3 per cent, within the guided range of 21-23 per cent.

The company had increased its revenue growth guidance after the quarter ended December 31, 2019 for the second time in FY20. And the fact that it was not able to meet even its lower end of the revenue growth guidance shows that there were serious disruptions in revenue due to the Covid-19 pandemic.

No guidance

As a direct impact of the pandemic, Infosys has suspended its practice of giving annual revenue and EBIT margin guidance. Even its peer Wipro has suspended its practice of providing quarterly revenue guidance. Infosys did not specify when it would restart the practice or how long the demand for its services would be impacted by the pandemic.

TCS had earlier said that it expects the Covid-19 to impact its revenues to persist for the first half of FY21. TCS, though, does not provide any kind of revenue or margin guidance.

Segment performance

Apart from a 2.5 per cent rise in revenue (in dollar terms) of the hi-tech segment, all other segments posted sequential drop in revenue. Its financial service segment saw revenue (in dollar terms) fall 2 per cent to $1 billion. This segment makes up for nearly one-third of Infosys’ revenues. Retail sector which saw a rebound in sequential growth during the quarter ended December 31, 2019, saw revenues decline by 0.1 per cent.

The worst hit was the life-sciences, which was down 5.8 per cent Q-o-Q, and manufacturing was down 3.3 per cent Q-o-Q (both in dollar terms). In terms of geographies, North America revenues fell 1 per cent sequentially, and that of Europe and the rest of the world fell by 1.4 per cent and, 2.3 per cent, respectively.

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