Mumbai: IT major Infosys on Wednesday beat Street view as it posted a 11.5 per cent year-on-year (YoY) growth in June quarter profit and projected 0-2 per cent revenue growth in constant currency terms in FY21. The country’s second-largest IT firm reported a net profit of Rs 4,233 crore for the quarter, compared with Rs 3,798 crore reported for the corresponding quarter last year. Analysts in an ETNOW poll had estimate Q1 profit at Rs 3,820 crore.
Consolidated revenue increased 8.5 per cent year-on-year (YoY) to Rs 23,665 crore from Rs 21,803 crore in the same period last year. Analysts had projected Rs 22,600 crore. Ahead of its earnings announcement, Infosys shares rose 6.16 per cent to Rs 831.45, and were the biggest contributor to the gains in Sensex, which rose 0.05 per cent to close at 36,051 points.
Here are the key takeaways from Infosys’ Q1 earnings announcement:
Guidance: The company gave a revenue growth guidance in the 0-2 per cent range in constant currency terms for FY 21, while 0perating margin is seen in the 21-23 per cent range.
Margin expansion: Infosys’ operating margin came in at 22.7 per cent, an increase of 220 basis points year-on-year. Free cash flow was at Rs 5,524 crore, up 63.5 per cent YoY.
Management commentary: Operating margin expanded to 22.7 per cent driven by preemptive deployment of our strategic cost levers along with tactical opportunities triggered by the Covid situation,” said CFO Nilanjan Roy, CFO. “Collections were robust and capex was focused, which led to 50 per cent year on year increase in free cash flows. Our liquid and debt free Balance Sheet is a huge source of strength in these times,” he added.
Digital revenues rise: Digital revenues at $1,389 million (44.5 per cent of total revenues) grew 25.5 per cent year-on-year in constant currency terms.
Voluntary attrition drops: Voluntary attrition at the IT services division declined to 11.7 per cent from 20.2 per cent in Q1 20.
Board changes: Infosys appointed Bobby Parikh as additional and independent director of the company for three years, subject to the approval of the shareholders.