Infosys Q3 results: Profit down 7.3%, FY24 guidance revised; management commentary, key takeaways

The Salil Parekh-led Infosys Ltd on Thursday reported a 7.3 per cent year-on-year (YoY) fall in net profit at Rs 6,106 crore for the December quarter compared with Rs 6,586 crore in the same quarter last year. The profit de-growth came in line with analyst projections of 5-8 per cent de-growth. The Bengaluru-based IT firm said its revenue for the quarter rose 1.3 per cent YoY to Rs 38,821 crore from Rs 38,318 crore in the same quarter last year. Analysts were expecting a flattish revenue growth in rupee terms. Operating margin for the quarter came in at 20.5 per cent, down 100 basis points over the year-ago's 2.5 per cent.

Infosys Q3 highlights

The IT firm said its dollar revenue came in at $4,663 million in Q3 revenues with year-on-year and sequential decline of 1 per cent in constant currency terms. Large deal wins for the quarter stood at $3.2 billion, with 71 per cent being net new. Infosys' total contract value (TCV) stood at $7.7 billion in the September quarter and $2.3 billion in the June quarter.

Management commentary

“Our performance in Q3 was resilient. Large deal wins were strong at $3.2 billion, with 71% of this as net new, reflecting the relevance and strength of our portfolio of offerings ranging from generative AI, digital and cloud to cost, efficiency and automation” said Salil Parekh, CEO and MD. “Our clients are leveraging our Topaz generative AI capabilities and our Cobalt cloud capabilities to create long-term value for their businesses”, he added.

Infosys FY24 guidance

The second largest IT player by sales revised its FY24 revenue guidance to 1.5-2 per cent against at 1-2.5 per cent earlier. Ebit margin guidance is kept unchanged at 20-22 per cent. Infosys had narrowed it guidance in the last two quarters To recall, Infosys had lowered its FY24 revenue guidance after September quarter results from 1.35 per cent post June quarter results and 4-7 per cent after March quarter earnings.

InSemi acquisition

Infosys has announced a definitive agreement to acquire InSemi, a semiconductor design and embedded services provider.

"This strategic investment further strengthens Infosys’ Engineering R&D capabilities and demonstrates its continued commitment to co-create with global clients to help them navigate their digital transformation journey," the It firm said.

This collaboration, Infosys said, would help accelerate Infosys’ Chip-to-Cloud strategy, by bringing niche design skills at scale and will also pair seamlessly with existing investments in AI/Automation platforms and industry partnerships. The collaboration will aim to orchestrate comprehensive end-to-end product development for clients, TCS said.

Infosys stock movement

Earlier today, Infosys shares closed at Rs 1,495 on BSE, down 1.62 per cent. The IT stock is up 12 per cent in the last six months and mere 1 per cent in the last one year.

(More to come)

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