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Informist, Thursday, Jan. 16, 2025

 

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--Infosys Oct-Dec consol net profit INR 68.06 bln vs INR 65.06 bln qtr ago 
--Analysts saw Infosys Oct-Dec consol net profit INR 67.47 bln 
--Infosys Oct-Dec consol revenue INR 417.64 bln vs INR 409.86 bln qtr ago 
--Infosys Apr-Dec consol net profit INR 196.80 bln vs INR 182.64 bln year ago 
--Infosys Apr-Dec consol revenue INR 1.22 tln vs INR 1.16 tln year ago 
--Infosys Oct-Dec fincl svcs sales up 6.1% on year in constant currency 
--Infosys Oct-Dec revenue from fincl svcs 27.8% of sales, unch from year ago 
--Infosys Oct-Dec retail segment sales up 0.1% on yr in constant currency 
--Infosys Oct-Dec revenue from retail ops 13.8% of sales vs 14.6% year ago 
--Infosys Oct-Dec communication sales up 4% on yr in constant currency 
--Infosys Oct-Dec revenue from comm ops 11.2% of sales vs 11.4% year ago 
--Infosys Oct-Dec operating margin 21.3%, up 0.8% on year 
--Infosys Oct-Dec mfg segment sales up 10.7% on year in constant currency
--Infosys Oct-Dec N America sales up 4.8% on year in constant currency 
--Infosys Oct-Dec large deal total contract value $2.5 bln 
--Infosys Oct-Dec Europe sales up 12.2% on year in constant currency 
--Infosys Oct-Dec free cash flow $1.26 bln, up 90% on year; highest ever 
--Infosys last 12-month attrition 13.7% vs 12.9% quarter ago 
--Infosys employee headcount 323,379 as on Dec 31 vs 317,788 on Sept 30

 

By Anjana Therese Antony

 

MUMBAI – Backed by broad-based growth, the increase in Infosys Ltd.'s bottom line not only beat the Street's view, but was also the fastest in three quarters in a seasonally weak Oct-Dec for information technology sector. Its top line also came higher than what analysts had expected, but the pace of growth was the slowest in three quarters. 

 

The Bengaluru-based company's consolidated net profit rose 4.6% sequentially to INR 68.06 billion, beating analysts estimate of INR 67.47 billion. Consolidated revenue increased 1.9% to INR 417.64 billion, also beating the Street's view of INR 412.36 billion. From the year-ago period, the bottom line rose 11.5% and the top line grew 7.6%. 

 

"Our strong revenue growth sequentially in a seasonally weak quarter and broad-based year-on-year growth, along with robust operating parameters and margins, is a clear reflection of the success of our differentiated digital offerings, market positioning, and key strategic initiatives," Chief Executive Officer and Managing Director Salil Parekh said in a press release. 

 

The company also raised its revenue growth guidance for 2024-25 (Apr-Mar) in constant currency terms to 4.5-5.0% from 3.75-4.50?rlier. The upper end of the revenue growth guidance exceeds the most optimistic estimate of 4.75% by some analysts. It also retained its 20-22% operating margin guidance for the eighth time. The company's operating margin, calculated as earnings before interest and taxes expanded 20 basis points sequentially and 80 bps on year to 21.3%. Broking firms had expected the EBIT margin between 20.8% and 21.4%. "Our structured approach to operating margin expansion yielded more results in Q3 (Oct-Dec), particularly due to benefits from improving realisation and scale benefits," Chief Financial Officer Jayesh Sanghrajka said in a press release.

 

Infosys, India's second-largest IT company in terms of market capitalisation, received large deals worth $2.5 billion. "We continue to strengthen our enterprise AI (artificial intelligence) capabilities, particularly focusing on generative AI, which is witnessing increasing client traction", Chief Executive Officer and Managing Director Salil Parekh said in a press release. "This has led to another quarter of strong large deal wins and improved deal pipeline giving us greater confidence as we look ahead", he added. 

 

It also posted the highest-ever free cash flow of $1.26 billion, up 90% on year. For the nine months ended December, the bottom line was up 7.8% at INR 196.80 billion and the top line rose 5.5% to INR 1.221 trillion. Infosys released its quarterly results after market hours Thursday and its shares closed 1.1% lower at INR 1,928.45 on the National Stock Exchange. 

 

The company's headcount increased by 5,591 to 323,379, up the second consecutive quarter and employee utilisation, excluding trainees, rose slightly to 83.4% during the latest quarter from 84.3% in Jul-Sept. The last twelve-month attrition rose to 13.7% as on December from 12.9% three months ago. Infosys spent INR 214.36 billion under employee benefit expenses, down 0.6% on quarter. This expenditure fell for the first time sequentially in three quarters. 

 

SEGMENT, GEOGRAPHY

The revenue from its biggest segment--financial services--grew 6.1% on year in constant currency terms, and the revenue contribution of 27.8% to the total sales of the company was the same as that in the year-ago period. Its second-most revenue contributor, the manufacturing vertical, grew 10.7% in constant currency, the most among all its segments. Revenue contribution from the segment rose to 15.5% of the total from 14.9% a year ago. 

 

When it comes to the next biggest segments, the energy, utility, resources, and services segment's revenue increased nearly 9% on year, marking the second-fastest growth among all the verticals. However, the retail vertical grew only 0.1% on year in constant currency, the slowest growth compared to other business operations of the company. Its revenue contribution to the overall sales also declined to 13.8% from 14.6% a year ago. 

 

With respect to revenue from its communications business, its top line increased 4% on year in constant currency, but the contribution declined to 11.2% of total sales in the latest quarter from 11.4% a year ago. This includes revenue earned from enterprises in communications, telecommunications, original equipment manufacturing, and media, the company said. 

 

Geographically, Infosys' revenue from its major region, North America, grew 4.8% on year in constant currency and accounted for 58.4% of the overall top line. Its revenue from the second-biggest region, Europe, rose 12.2%, constituting 29.8% of total sales of the company. India, which only contributed 3.1% to the top line, grew a whopping 40.1% in constant currency terms.  End

 

US$1 = INR 86.55

 

Edited by Deepshikha Bhardwaj

 

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