Infosys Q1 Highlights: PAT falls 3% to Rs 5,945 crore, misses analysts' estimates; IT major trims revenue guidance
Infosys Q1 highlights: Infosys — India's second-largest IT services company after Tata Consultancy Services — reported a three per cent sequential drop in net profit to Rs 5,945 crore for the April-June period, missing Street estimates. Its revenue grew 1.3 per cent on a quarter-on-quarter basis to Rs 37,933 crore and operating margin contracted by 20 basis points to 20.8 per cent, according to a regulatory filing.
The quarterly financial results of Bengaluru-based Infosys come roughly a week after Tata group IT major TCS kicked off the earnings season for India Inc.
“We had a solid Q1 with a growth of 4.2 per cent and large deals of $2.3 billion which helps us to set a strong foundation for future growth. Our generative AI capabilities are expanding well, with 80 active client projects. Topaz, our comprehensive AI offering, is resonating well with clients. We see this being transformative for clients and enhancing our overall service portfolio” said Salil Parekh, CEO and MD, Infosys.
“We have expanded the margin improvement program with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by our leadership team," he added.
Catch highlights of Infosys Q1 results here:
Infosys Q1 highlights: Infosys — India's second-largest IT services company after Tata Consultancy Services — reported a three per cent sequential drop in net profit to Rs 5,945 crore for the April-June period, missing Street estimates. Its revenue grew 1.3 per cent on a quarter-on-quarter basis to Rs 37,933 crore and operating margin contracted by 20 basis points to 20.8 per cent, according to a regulatory filing.
The quarterly financial results of Bengaluru-based Infosys come roughly a week after Tata group IT major TCS kicked off the earnings season for India Inc.
“We had a solid Q1 with a growth of 4.2 per cent and large deals of $2.3 billion which helps us to set a strong foundation for future growth. Our generative AI capabilities are expanding well, with 80 active client projects. Topaz, our comprehensive AI offering, is resonating well with clients. We see this being transformative for clients and enhancing our overall service portfolio” said Salil Parekh, CEO and MD, Infosys.
“We have expanded the margin improvement program with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by our leadership team," he added.
Catch highlights of Infosys Q1 results here:
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Infosys Q1 Results | Attrition eases to 17.3%
Infosys says voluntary attrition in IT services stands at 17.3 per cent for the quarter ended June 30, 2023, as against 20.9 per cent for the previous three months and 28.4 per cent for the quarter ended June 30, 2022.
Infosys Q1 Results | Revenue guidance cut to 1-3.5% from 4-7%
Infosys lowers its revenue guidance for the year ending March 2024 to between 1.0 and 3.5 per cent, from 4-7 per cent.
It, however, leaves its operating margin guidance unchanged at 20-22 per cent.
Infosys Q1 Results | Revenue in constant currency terms grows 1% sequentially
Revenue growth in constant currency terms comes in at 4.2 per cent on a year-on-year basis, according to a regulatory filing.
Operating margin resilient in an uncertain macro environment on the back of continued focus on cost optimisation: Infosys CFO Nilanjan Roy
Infosys CFO Nilanjan Roy says that the company’s rigorous operational discipline including improved productivity measures and higher utilisation helped margins for the quarter.
“Free Cash conversion was robust at 96.6 per cent of net profits. Execution of strong capital allocation policy resulted in higher payouts to investors and improved ROE to 32.8 per cent,” he adds.
Infosys Q1 Results | Operating margin at 20.8%
Infosys reports an operating margin of 20.8 per cent for the three-month period, slightly below analysts' estimates.
According to Zee Business research, Infosys was estimated to report an operating margin of 21.1 per cent for the quarter.
Infosys had a solid Q1, it helps us set a strong foundation for future growth: CEO Salil Parekh
“We had a solid Q1 with a growth of 4.2 per cent and large deals of $2.3 billion which helps us to set a strong foundation for future growth. Our generative AI capabilities are expanding well, with 80 active client projects. Topaz, our comprehensive AI offering, is resonating well with clients. We see this being transformative for clients and enhancing our overall service portfolio,” says Salil Parekh, CEO and MD, Infosys.
“We have expanded the margin improvement program with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by our leadership team," he adds.
Infosys Q1 Results | Revenue at Rs 37,933 crore vs Rs 37,441 crore for March quarter
Infosys's revenue for the April-June period stands at Rs 37,933 crore, which means a quarter-on-quarter increase of 1.3 per cent.
Infosys Q1 Results | Net profit at Rs 5,945 crore vs Rs 6,128 crore for March quarter
Infosys shares fall 2% ahead of Q1 results announcement
Infosys shares end 1.7 per cent lower at Rs 1,448.9 apiece on BSE and 2.2 per cent lower at Rs 1,442.8 apiece on NSE.
Here's how the stock moved through the day:
Image: BSE
Infosys Q1 Results Today | All eyes on 2023-24 guidance update, deal pipeline, attrition & pricing
According to Zee Business research, weakness in the BFSI, telecom and high-tech segments is likely to dent Infosys's overall revenue. Analysts will closely look out for any changes in the IT giant's revenue guidance for the year ending March 2024.
Infosys has guided for 4-7 per cent growth in revenue in constant currency terms and 20-22 per cent EBIT margin for the financial year 2023-24.
Infosys revenue growth to be flat in constant currency terms in Q1: IDBI Capital
According to IDBI Capital, the IT major's revenue growth is expected to be flat in constant currency terms with a cross-currency tailwind of 24 bps. The brokerage expects muted growth for the company on account of delayed decision-making by clients and a reduction in discretionary spending.
Infosys Q1 Results Today | Margin seen improving by 10 basis points sequentially
Zee Business analysts peg Infosys's margin for the April-June period at 21.1 per cent, as against 21 per cent for the previous three months.
Infosys Q1 Results Today | Here's what else to expect
According to Zee Business research, Infosys is likely to report Rs 8,000 crore in earnings before interest and taxes (EBIT), translating to a sequential increase of 1.6 per cent.
What to expect in Infosys Q1 earnings report?
According to Zee Business research, Infosys is likely to report a net profit of Rs 6,330 crore for the April-June period, which translates to a sequential increase of 3.3 per cent.
The analysts estimate the IT major's revenue in rupee terms to increase 1.4 per cent on a quarter-on-quarter basis to Rs 37,950 crore, and that in dollar terms to expand 1.1 per cent to $4,603 million.
