Infosys raises growth outlook for FY24
IT major’s net rises 7.1% to Rs 6,368 cr in June qtr; revenues up 3.6% to Rs 39,315 cr
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We had an excellent start to FY25 with strong and broad-based growth, operating margin expansion, robust large deals, and highest ever cash generation. - Salil Parekh, CEO & MD, Infosys
Strong Traction:
- IT major to hire 15,000-20,000 freshers this fiscal year
- It will continue to recruit through both on-campus and off-campus route
- Better times for financial services vertical anticipated with uptick in the US
Bengaluru: India’s second largest IT services firm, Infosys on Friday posted a good set of numbers for the first quarter, beating market expectations.
For the first quarter ended June, the Bengaluru-headquartered firm reported a net profit of Rs 6,368 crore, which was a growth of 7.1 per cent over the same period last year. Its revenue from operations during this period rose 3.6 per cent to Rs 39,315 crore on YoY basis.
In dollar term, revenue for April-June quarter stood at $4.714 billion, which was a rise of 3.6 per cent sequentially in constant currency basis. Its larger peer TCS grew its revenue by 2.2 per cent during this period.
The company said its number of large deal wins were the highest ever at 34 with TCV (total contract value) of $4.1 billion, out of which 57.6 per cent were net new.
On the back of sound deal pipeline, growth revival in the financial services vertical and completion of InSemi; the company revised its revenue guidance for the whole fiscal. Infosys now expects its revenue to grow by 3-4 per cent in FY25 from earlier guidance of 1-3 per cent.
“We have raised our guidance factoring in the current environment. Our volume has grown along with performance in the BFSI vertical has improved. We also have a strong deal pipeline and completed the acquisition of InSemi. These are the guiding factors behind raising our revenue guidance,” Salil Parekh, CEO of Infosys said during the post results press conference.
“Demand environment in Europe remains good and we saw better outcomes for the US BFSI (banking, financial services & insurance) vertical. We have also seen good traction in our Generative AI and cloud-led offerings in the first quarter,” Parekh added.
The IT major saw improvement in its operating margin to 21.1 per cent, up 100 basis points over the previous quarter.
“Our relentless drive on cost optimization through Project Maximus, a comprehensive margin expansion programme, is reflected in the all-round improvement in key operating metrices leading to 1 per cent growth in operating margin in Q1”, said Jayesh Sanghrajka, CFO at Infosys. He said the pricing environment remains stable for the company and it is able to charge clients on value-based offerings. During the first quarter, Infosys saw sequential growth in all its geographies and verticals. Among verticals, the growth momentum was seen in the financial services vertical with US financial institutions leading the show. Manufacturing remained another growth spot for the IT major. However, softness in the hi-tech continued to remain owing to lack of discretionary spend by clients.
In the GenAI space, the company said it was working on several projects but declined to quantify such deals.
Infosys’ headcount fell in the first quarter with employee strength falling by 1,908 people to 315,332. Its attrition stood at 12.7 per cent during the quarter.
