Why Infosys reported lower margin in Q4
Premium- Infosys has set a revenue growth guidance for FY23 at 13%-15% for FY23 and an operating margin guidance of 21%-23%.
India's second largest IT service provider Infosys' margin for the fourth quarter (Q4FY22) contracted on a sequential basis to 21.5% from 23.5% (QoQ). Its consolidated net profit slipped to ₹5,686 crore for the March quarter as compared to ₹5,809 crore quarter-on-quarter.
"We plan to neutralize some of the impact through aggressive cost optimization programs and value led pricing driven by service and brand differentiation. This, along with post pandemic normalization of expenses, is reflected in the margin guidance", said Infosys' Chief Financial Officer (CFO) Nilanjan Roy.
He added that there was issue with a client contract which the company hopes to reverse soon. “With a robust demand environment ahead, we envisage making appropriate long-term investments in capability building across sales, delivery and innovation," Roy said.
The revenues in Constant Currency (CC) terms grew by 21% over last year and 1.2% sequentially, while reported dollar revenues came in at $4,280 million, a growth of 18% year-on-year (YoY).
The company has set a revenue growth guidance for FY23 at 13%-15% for FY23 and an operating margin guidance of 21%-23%.
The IT giant's attrition rate zoomed to 27.7% in March quarter, up from 25.5% in the December quarter. Infosys has hired 85,000 freshers in the financial year gone by and is looking to hire upwards of 50,000 in the current fiscal.
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“Infosys delivered highest annual growth in a decade with broad-based performance driven by deeply differentiated digital and Infosys Cobalt led cloud capabilities, powered by ‘One Infosys’ approach. We continue to gain market share as a result of sustained clients’ confidence in our ability to successfully navigate their digital journeys", said Infosys CEO and MD Salil Parekh.