Infosys Q1 results: Net profit jumps 7.1% to Rs 6,368 crore; FY25 CC revenue guidance at 3-4%

The Salil Parekh-led Infosys Ltd on Thursday reported a 7.1 per cent year-on-year (YoY) rise in net profit at Rs 6,368 crore for the June quarter compared with Rs 5,945 crore in the same quarter last year. Revenue for the quarter grew 3.6 per cent YoY at Rs 39,315 crore against Rs 37,933 crore in the corresponding quarter of last year. Analysts were expecting the IT major to report up to 10 per cent rise in net profit on a muted single-digit growth in revenue.

“We had an excellent start to FY25 with strong and broad-based growth, operating margin expansion, robust large deals, and highest ever cash generation. This is a testimony to our differentiated service offerings, enormous client trust, and relentless execution”, said Salil Parekh, CEO and MD. “With our focused approach for generative AI for enterprises working with their data sets on a cloud foundation, we have strong traction with our clients. This is building on our Topaz and Cobalt capabilities” he added.

Operating margin came in at 21.1 per cent, up 30 basis points over 20.8 per cent in the year-ago quarter. Sequentially, 100 basis. Analysts had expected YoY margin to stay flattish. The second largest IT software exporter gave a revenue growth guidance of 3-4 per cent for FY25 in constant currency (CC) terms. It suggested operating margin of 20-22 per cent for FY25. The IT firm had suggested FY25 revenue growth guidance of 1-3 per cent early.

For the June quarter, Infosys reported 3.6 per cent QoQ and 2.5 per cent YoY revenue growth in CC terms. Infosys said its large deal wins stood at $4.1 billion. This was below analyst estimates of $5 billion. Infosys said its free cash flow stood at Rs 9,155 crore, up 59.2 per cent YoY.

Infosys' total employee stood at Rs 3,15,332, down 3,17,240 over March quarter. Voluntary Attrition (%) 12.7 per cent against 12.6 per cent in March and 17.3 per cent in the June quarter of last year.

“Our relentless drive on cost optimization through Project Maximus, a comprehensive margin expansion program, is reflected in the all-round improvement in key operating metrices leading to 1 per cent growth in operating margin in Q1”, said Jayesh Sanghrajka, CFO. “We had the highest ever FCF generation at $1.1 billion and ROE increased to 33.6% due to higher payouts to investors”, he added.

The IT major will host a press conference at 4.30 pm and a 60-minute conference call later in the day at 6 pm.