Infosys beats street's estimates, reports 6.3% QoQ CC revenue growth on strong deal momentum in Q2FY22; PAT up 4.4% QoQ

India’s second-largest IT company Infosys on Wednesday delivered a strong Q2 performance with year-on-year growth increasing to 19.4 per cent and sequential growth accelerating to 6.3 per cent in constant currency. However, as expected it reported pressure on the margins on QoQ basis. 

The consolidated net profit of the company grew by 4.4 per cent to Rs 5,421 crore as against Rs 5,195 crores in the previous quarter, while the revenue stood at 29602 crores, up 6.1 per cent QoQ. Similarly, in dollar terms the revenue surged 5.7 per cent to $3998 million on a sequential basis. 

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The company has raised FY22 Constant Currency Guidance to 16.5-17.5 per cent from 14-16 per cent, while FY22 EBIT margin guidance maintained at 22-24 per cent.

Infosys in its result filing to exchange said, “Digital revenues at 56.1 per cent of total revenues, YoY CC growth of 42.4 per cent; operating margin stood at 23.6 per cent, decline of 1.8 per cent YoY and marginal fall 0.1 per cent QoQ.”

Similarly, “Basic EPS at $0.17, growth of 13 per cent YoY and free cash flow (FCF) at $712 million, YoY growth of 5.6 per cent and FCF conversion at 97.1 per cent of net profit, the company further said.

The company also said that the growth was broad-based across geographies and segments with the largest geography, North America growing at 23.1 per cent, and the largest segment, Financial Services growing at 20.5 per cent YoY in constant currency.

Also Read: Infosys Q2FY22 Earnings Results – Street expects a 4.9% jump in Dollar revenues; wage hikes, supply-side issues to hit margins

Similarly, large deal momentum continued with TCV of $2.15 billion in Q2. The operating margin for the quarter was resilient at 23.6 per cent, it mentioned.

The Board has announced an interim dividend of Rs 15 per share for FY22, the company said in a release.

The company has completed the open market share buyback on September 8 at an average price of around Rs 1,649 per share (compared to maximum Buyback Price of ₹1,750 per share), it said in a filing, further adding, Consequently, the share capital of the company has reduced by 1.31 per cent.

With this, the company has returned around 82 per cent of the free cash flow for FY20 and FY21 through dividends and buyback, the company pointed out.