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Informist, Wednesday, Jul. 23, 2025

 

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--Analysts saw Infosys Apr-Jun consol net profit at INR 67.85 bln
--Infosys Apr-Jun consol net profit INR 69.21 bln
--Infosys: See FY26 revenue growth 1-3% in constant currency vs 0-3?rlier
--Infosys Apr-Jun consol net profit INR 69.21 bln vs INR 70.33 bln qtr ago
--Infosys retains FY26 operating margin guidance at 20-22%
--Infosys Apr-Jun consol revenue INR 422.79 bln vs INR 409.25 bln qtr ago
--Infosys Apr-Jun fincl svcs sales up 5.6% on year in constant currency
--Infosys Apr-Jun mfg sales up 12.2% on year in constant currency
--Infosys Apr-Jun retail revenue up 0.4% on year in constant currency
--Infosys Apr-Jun energy, utilities sales up 6.4% on yr in constant currency
--Infosys Apr-Jun revenue up 2.6% QoQ in constant currency, up 3.8% on yr
--Infosys Apr-Jun communication sales up 4% on yr in constant currency
--Infosys Apr-Jun operating margin 20.8% vs 21% qtr ago
--Infosys Apr-Jun hi-tech revenue up 1.7% on year in constant currency
--Infosys Apr-Jun life science revenue dn 7.9% on year in constant currency
--Infosys Q1 large deal total contract value $3.8 bln vs $2.6 bln qtr ago
--Infosys Apr-Jun N America sales up 0.4% on year in constant currency
--Infosys Apr-Jun free cash flow $884 mln
--Infosys Apr-Jun Europe sales up 12.3% on year in constant currency
--Infosys Apr-Jun revenue from India dn 1% on year in constant currency
--Infosys Apr-Jun revenue from fincl svcs 27.9% of sales vs 28.4% qtr ago
--Infosys Apr-Jun revenue from mfg segment 16.1% of sales vs 15.9% qtr ago
--Infosys last 12-month attrition 14.4% vs 14.1% quarter ago
--Infosys Apr-Jun revenue from retail ops 13.4% of sales vs 13.3% qtr ago
--Infosys employee headcount 323,788 as on Jun 30 vs 323,578 on Mar 31
--Infosys Apr-Jun energy, utilities revenue 13.6% of sales vs 13.0% qtr ago
--Infosys employee utilisation including trainees 82.7% vs 81.9% qtr ago
--Infosys Apr-Jun revenue from comm ops 12.0% of sales vs 11.7% qtr ago
--Infosys employee utilisation excluding trainees 85.2% vs 84.9% qtr ago
--Infosys Apr-Jun revenue from N America 56.5% of sales vs 57.1% qtr ago
--Infosys Apr-Jun revenue from Europe 31.5% of sales vs 31.2% qtr ago
--Infosys Apr-Jun revenue from India 2.9% of sales, unchanged from qtr ago
 

 

By Anand JC

 

NEW DELHI – The consolidated net profit of Infosys Ltd. beat analysts' expectations, but contracted sequentially for the first time in the last four quarters. Its revenue too managed to beat analysts' estimates but continued to grow in single digit sequentially owing to weakness in its largest market, North America.

 

The Bengaluru-based tech major's consolidated net profit for the June quarter was INR 69.2 billion, nearly 2% lower sequentially but nearly 9% higher on year. Analysts had estimated a bottom line of INR 67.8 billion. Revenue for the quarter stood at INR 422.8 billion, up just over 3% sequentially and nearly 8% on year. Its top line came in higher than analysts' estimate of INR 418.3 billion.

 

Infosys' manufacturing, financial services, and energy utilities, resources and services segments reported robust year-on-year growth during the quarter. The retail segment remained flat, while life sciences and other segments contracted. In terms of geographies, revenue from North American clients barely grew year-on-year, even as Europe grew in double digits.

 

Infosys has guided for revenue growth of 1-3% for 2025-26 (Apr-Mar) in constant currency terms, a slight improvement from the 0-3% forecast in April. The company still expects its operating margin for FY26 to be between 20% and 22%, the same as in April.

 

In the reporting quarter, the company's revenue grew 2.6% sequentially and 3.8% on year in constant currency terms.

 

SEGMENTAL REVENUE GROWTH

Financial services remain the biggest contributor to Infosys' overall revenue, at nearly 28%. Revenue from this segment grew 5.6% on year during the June quarter in constant currency terms. Contribution of the manufacturing segment to the company's revenues grew to just over 16% from 14.7% in the year-ago quarter. Revenue from the segment grew 12.2% on year in constant currency terms. 

 

The energy, utilities, resources, and services segment, contributing nearly 14% to the overall top line, grew 6.4% in constant currency terms while retail segment with a similar contribution remained flat. The communication segment's revenue growth was 4% in constant currency terms. Earnings from the life sciences segment fell nearly 8% on year in constant currency terms during the June quarter.

 

GEOGRAPHIC PERFORMANCE

Infosys' earnings from North America fell during the reporting quarter, and so did its contribution to overall revenues, amid weakness caused by tariff uncertainty. Revenues from the region barely grew on year in constant currency terms during the June quarter. Its contribution fell to 56.5% from 58.9% in the year-ago quarter.

 

Europe fared much better, as revenues from clients there grew 12.3% on year in constant currency terms during the reporting quarter. In contrast to North America, the region's contribution to Infosys' overall revenues increased to 31.5% now from 28.4% in the base quarter. 

 

Infosys earns around 9% of its revenues from the rest of the world. Growth in these regions was largely flat. Revenues from India, where the company earns nearly 3% of its top line, contracted by a percent in constant currency terms. 

 

The company added 93 clients on a gross basis in the latest quarter, compared to 87 last year. Infosys had 1,861 active clients as of Jun. 30, six lower than the year-ago quarter.

 

OPERATING PERFORMANCE

Infosys' consolidated operating margin for the reporting quarter stood at 20.8%, about 20 basis points lower sequentially and 30 bps on year. Its free cash flow was INR 75.3 billion, or $884 million as of Jun. 30, down nearly 18% on year. Conversion of free cash flow was 108.8% of its net profit.

 

"Cash flow conversion was well above 100% for the fifth consecutive quarter. The impact of currency volatility was effectively managed through our proactive hedging strategy," Infosys' Chief Financial Officer Jayesh Sanghrajka said in a press release. 

Large deal wins for the quarter stood at $3.8 billion, with 55% of them being new on a net basis. In the last quarter, total contract value of large deals stood at $2.6 billion. 

 

EMPLOYEE METRICS

Employee benefit expenses remain the biggest expense for the company. It incurred INR 228.5 billion on staff costs during the quarter, up 4% sequentially and just over 9% on year – both the growth rates are at multi-quarter highs. 

 

Employee headcount at Infosys stood at 323,788 as of Jun. 30, compared to 315,332 a year ago. Of this, software engineers at the company increased to 306,706 as of Jun. 30 from 298,123 a year ago. The voluntary attrition rate in the information technology services segment in the last 12 months stood at 14.4% as of Jun. 30, compared to 14.1% as of Mar. 31, and 12.7% a year ago.

 

Utilisation of emloyees, including trainees, was 82.7% as of Jun. 30, compared to nearly 84% a year ago. Excluding trainees, utilisation stood at 85.2%, largely unchange on year.

 

Infosys disclosed its June quarter earnings after the market closed. Its shares shed some gains in the final minutes of the trading session on the National Stock Exchange, but managed to close 0.2% higher at INR 1,574.50 apiece.  End

 

US$1 = INR 86.41

 

Edited by Avishek Dutta

 

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