Infosys Q1 Results: Net profit slips 3% QoQ to Rs 5,945 crore; FY24 revenue guidance slashed to 1.0%-3.5%

Infosys Q1 Results: Infosys reported on Thursday a net profit of Rs 5,945 crore for the quarter ended June 30, 2023, translating into a 3.1 per cent decline on a sequential basis. On a year-on-year (YoY) basis, the figure grew by 10.9 per cent. Revenue for the quarter under review came in at Rs 37,933 crore, up 1.3 per cent QoQ and 10 per cent YoY. Revenue in US dollar terms increased 1.4 per cent QoQ to $4,617 million. On a YoY basis, the number increased by 3.9 per cent. Revenue in constant currency (CC) terms increased 4.2 per cent YoY and 1 per cent QoQ.

Operating profit stood at Rs 7,891 crore, up 14.1 per cent YoY and 0.2 per cent QoQ, while operating profit margin was 20.8 per cent against 20.1 per cent in the year-ago period and 21 per cent in the March 2023 quarter. Basic earnings per share (EPS) were Rs 14.37, up 12.4 per cent YoY. It won large deals worth $2.3 billion during the quarter.

"We had a solid Q1 with a growth of 4.2% 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. "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", the CEO added.

Further, the company slashed its FY24 revenue guidance. In the previous quarter, the company had guided for 4 per cent -7 per cent, which in Q1FY24 has been revised downwards to 1.0 per cent - 3.5 per cent in constant currency terms. The guidance for the operating margin remains the same: 20 per cent and 22 per cent.

"Q1 operating margins were resilient in an uncertain macro environment on the back of our continued focus on cost optimisation. The company’s rigorous operational discipline, including improved productivity measures and higher utilisation, helped margins for the quarter," said Nilanjan Roy, CFO. "Free Cash conversion was robust at 96.6% of net profits. Execution of a strong capital allocation policy resulted in higher payouts to investors and improved ROE to 32.8%," Roy added.

Source: Earnings release