Helped by a higher other income (including ₹242 crore interest on an income tax refund), Infosys reported a 10.6 per cent rise quarter-on-quarter in its consolidated net profit at ₹4,466 crore for the quarter ended December 31, 2019.

However, consolidated revenues rose only around 2 per cent (₹23,092 crore) as its mainstay segment financial services, and North American region saw tepid revenue growth.

Digital revenues — which now make up for 40 per cent of the IT bellwether’s revenues — grew 7.2 per cent during the quarter in dollar terms. Core revenues continued their sequential decline during the September quarter and declined 2.8 per cent.

The company again upped its yearly revenue growth guidance to 10-10.5 per cent from 9-10 per cent. The company had upped the lower end of its guidance in the quarter ended September 30, 2019.

There was only a marginal increase in expenses during the quarter which helped the company to post earnings before interest and tax margin of 21.9 per cent. This is within the guided range of 21-23 per cent for the financial year 2019-20. For the nine months ended, the margins came in at 21.4 per cent.

The company seems to have managed to reduce attrition of employees during the quarter. Annualised attrition at a consolidated level has now come down to 19.6 per cent compared to 21.7 per cent during previous quarter.

Segment performance

The company’s mainstay, financial services segment, saw dollar revenue growth turn negative. This led to the constant currency growth in revenue being just 1 per cent during the quarter. Even its energy, utilities, resources and services segment de-grew 1.3 per cent during the quarter.

The retail segment posted dollar revenue growth of 1.7 per cent after posting negative growth in the previous quarter. Manufacturing and life sciences segments posted decent dollar revenue growth of 3 per cent and 5.8 per cent, respectively.

In terms of geographies, revenues from North America were flat, while those from rest of the world shrunk during the quarter in dollar terms. European operations managed to post 2.3 per cent growth in dollar revenues.

Point of worry

A point that could worry investors is the days outstanding sales, which show how long it took to collect cash from clients. This has climbed to 73 days during the quarter compared to 66 days in the quarter ended September 30, 2019. This means it’s taking longer to collect its revenues that it has billed to customers.

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