Infosys has revised downward its FY24 constant currency (CC) revenue guidance to 1-3.5 per cent compared with 4-7 per cent suggested earlier. 
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Infosys has revised downward its FY24 constant currency (CC) revenue guidance to 1-3.5 per cent compared with 4-7 per cent suggested earlier. Infosys, the second largest IT firm by sales, on Thursday said its net profit (after minority interest) grew 10.9 per cent year-on-year (YoY) to Rs 5,945 crore for the June quarter compared with Rs 5,360 crore in the same quarter last year. Analysts were largely expecting a 14-18 per cent growth in the bottom line for the quarter.
Net sales for the Bengaluru-headquartered firm rose 10 per cent YoY to Rs 37,933 crore from Rs 34,470 crore in the corresponding quarter last year. Revenue growth came in line with Street expectations.
Operating margin for the quarter stood at 20.8 per cent, up 80 basis points over 20 per cent in the year-ago quarter, but down 20 basis points QoQ from 21 per cent in the March quarter. This was in line with analyst estimates.
Revenue came in at $4,617 million in dollar terms, with the IT firm clocking 1 per cent sequential (up 4.2 per cent YoY) sales growth in constant current (CC) terms. Analysts were expecting a sequential growth of 0.5-0.8 per cent.
Large deal wins came in at $2.3 billion. The IT firm has revised downward its FY24 CC revenue guidance to 1-3.5 per cent compared with 4-7 per cent suggested earlier. It has maintained its Ebit margin guidance at 20-22 per cent. While a few brokerages did anticipate some downward revision in revenue guidance, a 1-3.5 per cent growth target missed their forecasts by a wide margin.
Attrition for the quarter declined to 17.3 per cent from 20.9 per cent in March and 28.4 per cent in the yer-ago quarter.
“We had a solid Q1 with a growth of 4.2 per cent and large deals of $2.3 billion which helps us to set a strong foundation for future growth. Our generative AI capabilities are expanding well, with 80 active client projects. Topaz, our comprehensive AI offering, is resonating well with clients. We see this being transformative for clients and enhancing our overall service portfolio” said Salil Parekh, CEO and MD.
“We have expanded the margin improvement program with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by our leadership team”, he added.
CFO Nilanjan Roy said Q1 operating margins were resilient in an uncertain macro environment on the back of our continued focus on cost optimisation.
Infosys' rigorous operational discipline including improved productivity measures and higher utilisation helped margins for the quarter, he said . “Free Cash conversion was robust at 96.6 per cent of net profits. Execution of strong capital allocation policy resulted in higher payouts to investors and improved ROE to 32.8 per cent” he added.
What's next?
The leadership team of Infosys will meet for a press conference at 4:30 pm today, where the participating executives will address questions from the media during this interaction, which will be streamed live on the Investor Relations section of Infosys website. An archive for the same would be available after 6:30 pm.
Besides, the Bengaluru-based firm said it will conduct a 60-minute conference call at 6:00 pm, where the senior management will discuss the IT major's performance and answer questions from participants. Ahead of its quarterly results, Infosys shares were trading at Rs 1,450 on BSE, down 1.65 per cent. The top Nifty performer of Nifty in the last one month, Infosys shares fell as analysts do see tepid sequential revenue growth, a sequential fall in margin on wage hikes and chances of lowering of FY24 revenue guidance by the IT giant.
(More to come)
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