Infosys records 3.2% growth, revenue up by 6.8%

IT giant Infosys announced results for the first quarter ending June 30 on Sunday (July 24). The company has reported a consolidated net profit of ₹5,360 crore for the quarter ending in June 2022.

The company showed a 3.2 per cent year-on-year hike from ₹5,195 crores recorded in the same period last year.

The IT firm reported a consolidated revenue of ₹34,470 as against ₹32,276 in the preceding quarter, showing a percentage hike in revenue by 6.8 per cent.

For the current fiscal year, India’s second-largest IT company has set a revenue growth target of 14-16 per cent, higher than the earlier predicted target of 13-15 per cent.

As per reports, the operating margin is expected to grow 21-23 per cent in the financial year 2023.

The total operating expenses during April-June 2022 increased by 14.4 per cent year-on-year to ₹3,187 crore as against ₹2,787 crore in the previous year. The operating profit of the company witnessed a 4.7 per cent growth. It increased to ₹6,914 crore from 6,603 crore last year.

Infosys informed that the financial services grew by 12.1 per cent year-on-year in constant currency and manufacturing grew by 55.2 per cent year-on-year. Communications also grew by 30 per cent on a year-on-year basis.

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The company said that the operating margin was retained in the range of 21-23 per cent.

Salil Parekh, the CEO and MD of Infosys said in a statement: “Our strong overall performance in Q1 amidst an uncertain economic environment is a testament to our innate resilience as an organisation, our industry-leading digital capabilities and continued client-relevance.”

Parekh also said that the company is investing in rapid talent expansion while ensuring rewarding careers to its employees, to better serve evolving market opportunities. This, he said, has resulted in a strong performance in Q1 and an increase in FY23 revenue prediction.

The company informed that the total number of employees stood at 3,35,186 on June 30.

The firm has also added 106 new clients in Q1FY23 and there were 1,778 active clients as of June 30.

“We are fueling the strong growth momentum with strategic investments in talent through hiring and competitive compensation revisions. While this will impact margins in the immediate term, it is expected to reduce attrition levels and position us well for future growth. We continue to optimize various cost levers to drive efficiency in operations,” said Nilanjan Roy, Chief Financial Officer.

“Continued high focus on cash led to strong FCF to net profit conversion at 95.2% and improvement in ROE to 31.0 per cent,” he added.

Attrition remains a concern for Infosys as the rate jumped to 28.4 per cent in the June quarter from 27.7 per cent in the preceding March quarter.