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Informist, Thursday, Oct. 17, 2024

 

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--Infosys Jul-Sept consol net profit INR 65.06 bln
--Analysts saw Infosys Jul-Sept consol net profit INR 68.13 bln
--Infosys Jul-Sept consol revenue INR 409.86 bln
--Infosys Jul-Sept consol net profit INR 65.06 bln vs INR 63.68 bln qtr ago
--Infosys to pay INR 21 per share interim dividend
--Infosys Jul-Sept consol revenue INR 409.86 bln vs INR 393.15 bln qtr ago
--Infosys ups FY25 revenue growth guidance to 3.75-4.50% in constant currency
--Infosys sees FY25 operating margin at 20-22%
--Infosys Jul-Sept large deals total contract value $2.4 bln
--Infosys: Jul-Sept fincl svcs sales up 2.3% YoY in constant currency
--Infosys Apr-Sept consol net profit INR 128.74 bln vs INR 121.57 bln year ago
--Infosys: Jul-Sept retail segment sales down 9.6% YoY constant currency
--Infosys: Jul-Sept communication sales up 7.0% YoY in constant currency
--Infosys Apr-Sept consol revenue INR 803.00 bln vs INR 769.27 bln year ago
--Infosys: Jul-Sept N America sales down 2.7% on yr in constant currency
--Infosys: Jul-Sept Europe sales up 15.5% on year in constant currency
--Infosys: Last 12-month attrition at 12.9% vs 12.7% quarter ago
--Infosys: Employee headcount 317,788 on Sept 30 vs 315,332 on Jun 30
 

 

MUMBAI – Information technology major Infosys Ltd. delivered a stable performance for the September quarter, but its bottom line did not meet expectations. The company's consolidated net profit rose 2.2% sequentially to INR 65.06 billion in Jul-Sept, missing the consensus estimate of INR 68.13 billion. Even though the quantum of growth was low, it was sharply higher than that in the June quarter when the net profit had fallen sequentially by a substantial 20%.

 

The company's consolidated revenue from operations for the September quarter rose 4.3% on quarter to INR 409.86 billion, surpassing estimates of INR 408.38 billion. The revenue growth was higher than the 3.7% sequential growth in the June quarter and was the highest in seven quarters.

 

The IT behemoth's operating margin was flat at 21.1% in Jul-Sept as employee benefit expenses rose 3% on quarter to INR 215.64 billion, which was lower than the growth in revenue, and because of a 40?ll in software development expenses to INR 39.49 billion. However, other expenses jumped up nearly 12% on quarter to INR 13.96 billion.

 

Infosys added 86 clients during the September quarter, marginally lower than 87 in the previous quarter. The total number of clients was 1,870 at the end of September. Revenue contribution from the top five clients inched up to 13.7% in Jul-Sept from 13.5% in the previous quarter.

 

The company's revenue grew on the back of the manufacturing, and energy and utilities segments. The revenue share of manufacturing segment rose to 15.7% in the September quarter from 14.7% in the previous quarter. The energy and utilities segment accounted for 13.5% of total revenue in Jul-Sept and more than 13.3% share in the previous quarter. Financial services segment contributed the highest, 27.2% to total revenue, but its share was lower than 27.5% in the June quarter.

 

In terms of client geography, Infosys' revenue growth was aided by rise in business from its clients in Europe and Rest of World. The share of European clients in total revenue increased 50 bps on quarter to 29.8% in the September quarter, while that of Rest of World category increased marginally to 9.7% from 9.6%. The share of North America in revenue fell 150 bps on quarter to 57.4% while India's share stayed unchanged at 3.1%.

 

In constant currency terms, the company's consolidated revenue was up 3.1% on quarter. This was a "strong growth" based on "good momentum in financial services", Managing Director and Chief Executive Officer Salil Parekh was quoted as saying in a press release. "Our large deals at $2.4 billion in Q2 (Jul-Sept) reflect our differentiated position," Parekh said.

 

"Operating margins for the quarter was at 21.1%, driven by continued benefits from value-based pricing and utilization despite higher employee payouts," Chief Financial Officer Jayesh Sanghrajka was quoted as saying in the press release.

 

The operating profit of the company rose 4.4% on quarter to INR 86.49 billion in the quarter ended September. This growth was half the 8.8% sequential increase in operating profit in the June quarter. Even though operating margin stayed flat sequentially at 21.1% in Jul-Sept, it shows a slight deterioration compared to the sequential operating margin growth of 100 bps in the June quarter.

 

The company's free cash flow declined 23.4% sequentially to INR 70.10 billion in Jul-Sep. The employee headcount of Infosys increased to 317,788 as on Sep. 30 from 315,332 at the end of the previous quarter. The last 12-month voluntary attrition rate increased to 12.9% from 12.7% in Apr-Jun.

 

Infosys also increased its revenue growth guidance in constant currency terms to 3.75-4.50% for 2024-25 (Apr-Mar) from 3-4?rlier. But analysts were expecting the revenue growth guidance to be revised still higher to 4-5%. The company retained its margin guidance of 20-22% for the financial year, in line with expectations of the market.

 

In the six-month period ended September, the company's consolidated net profit increased 5.9% to INR 128.74 billion, and revenue from operations was up 4.4% at INR 803 billion. Infosys Thursday declared an interim dividend of INR 21 per share and fixed Oct. 29 as the record date. The dividend payout date is Nov. 8, the company said.

 

For operational synergies and rationalising the entity structure for legal purposes, the board of Infosys Thursday approved the merger of wholly-owned subsidiary WongDoody, step-down subsidiaries Blue Acorn iCi, Outbox Systems d.b.a Simplus, and Kaleidoscope Animations, with wholly-owned subsidiary Infosys Nova Holdings. The board also approved the acquisition of 100% stake in Singapore-based Blitz 24-893 SE by wholly-owned subsidiary Infosys Singapore Pte for 135,000 euros. The company being acquired does not have any operations, and the acquisition will be completed by the end of Mar 31.

 

On the National Stock Exchange, shares of Infosys Thursday closed at INR 1,968.10, up 2.5% from Wednesday.  End

 

US$1 = INR 84.07

 

Edited by Ashish Shirke

 

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