Infosys Q2 Results: PAT rises 3% YoY to Rs 6,212 crore; firm trims FY24 revenue guidance
Synopsis
Infosys has reported a 3% YoY growth in consolidated net profit for the quarter ended September. The company's consolidated revenue also grew nearly 7% YoY. Infosys has tweaked its guidance for FY24, expecting revenue growth of 1.0-2.5% in constant currency terms. The company retained its operating margin target of 20-22%. Infosys announced large TCV deals worth $7.7 billion for the quarter and saw a decline in attrition rate.
The board has recommended an interim dividend of Rs 18 per share.
In an unexpected move, the software major yet again tweaked its guidance for FY24. Infosys sees revenue growing 1.0-2.5% in constant currency terms in FY24, compared to 1.0-3.5% earlier.
While Infosys cut the upper end of its revenue growth guidance, the company retained its operating margin target of 20-22%.
The tweak in the guidance disappointed the Street as the American Depository Receipts (ADR) of Infosys plunged about 5% in pre-open trade on New York Stock Exchange. In the domestic market, the stock ended nearly 2% down at Rs 1,465.50 on the National Stock Exchange, and could further bleed in trade on Friday.
Infosys Q2 Results Highlights
- On a sequential basis, Infosys’ consolidated revenue grew nearly 3% and profit rose 4.5%
- In constant currency terms, revenue grew 2.3% sequentially and 2.5% on a YoY basis
- The company announced large TCV deals worth $7.7 billion for the quarter
Stocks Recommendations
Operating margin for the quarter increased by 40 basis points sequentially to 21.2%.
Like peer Tata Consultancy Services, Infosys also saw a further decline in attrition. The attrition rate on a 12-month trailing basis was down to 14.6%, from 17.3% a quarter ago.
Meanwhile, the net staff headcount was down by 7,530 in the September quarter to 3,28,764.
Employee utilization improved to 80.4% in the September quarter, from 78.9% in the June quarter.
Among verticals, financial services, which contribute the most to the overall revenue, declined 7.3% YoY in constant currency terms. Communications reported a 4.3% decline in constant currency revenue.
However, retail, manufacturing, and lifesciences verticals reported 9-18.4% growth in constant currency revenue.
From a geographical viewpoint, North America saw a muted 1% growth in the quarter, while Europe saw a strong 5.4% growth.