Infosys turns in stellar results; IT major records Rs 4,233 crore in June quarter

Infosys has on boarded almost 90% of those to whom offers were committed.

By Srinath Srinivasan

Infosys on Wednesday reported a strong set of numbers for the June quarter with net profits surpassing Street estimates even as it shrugged off restrictions on H-1B visas. Profits came in at Rs 4,233 crores, a 2% dip quarter-on-quarter while sales in the quarter rose to Rs 23,665 crores, up 1.7% sequentially. The operating margins increased by 160 basis points to 22.7% from 21.1% in the March quarter with company reining in costs.

The IT major said it expects revenues in the rest of 2020-21 to grow by 0 to 2% in constant currency terms and hopes to report an operating margin of 21% to 23%. The Infosys stock rose 6.2% on BSE to close at Rs 831, after hitting a 52-week high of Rs 848 on a day when tech stocks rallied smartly.

COO Pravin Rao observed that H-1B visa restrictions were not logical, adding there would be no impact in the short term as there was no travel happening.

“More than 60% of our employees are visa independent so even in medium to long-term we do not see much impact,” Rao said.

Nilanjan Roy, CFO, observed pricing and payment delays have not affected the company. “Few clients have come back for pricing and discounts though some have asked for extended payment terms,” he said. He added the company had contained costs and managed utlisation curves by putting new hikes and offers on hold.

“We also reskilled employees which further helped helped save costs. Costs were also cut on travel and visas and branding and marketing rates were negotiated,” Roy said.

CEO Salil Parekh said deals worth $1.7 billion were finalised in the quarter adding the partnership with Vanguard would give the business a boost. “Demand for digital services will continue to increase as the Covid-19 crisis has accelerated digital thinking. We see demand increasing in spaces like cloud, automation, cost efficiency improvement and work place automation,” Parekh said.

Infosys has on boarded almost 90% of those to whom offers were committed. Rao said 20,000 freshers were expected to join the firm and that more than 5,000 employees had been taken on board remotely across the globe.

“We have also invested in network infrastructure, cyber security tools, collaboration tools for our employees and so far we have not seen any discontinuity there,” he added.