Infosys, the India’s second largest software services provider, reported a 14.4 percent sequential growth in consolidated profit at Rs 4,845 crore for the September quarter, and revised its full year revenue as well as margin guidance given the highest ever deal wins in Q2.
Consolidated revenue from operations increased to Rs 24,570 crore in Q2FY21, up by 3.8 percent QoQ, while dollar revenue grew by 6.1 percent sequentially to $3,312 million for the September quarter, with constant currency revenue growth of 4 percent.
“The second quarter performance is a clear reflection of our ability to help clients on their digital transformation journeys. Digital and cloud capabilities combined with intense client relevance are helping us achieve differentiated results in the market as is visible in 2.2 percent year-on-year overall revenue growth and 25.4 percent growth from digital offerings, which now are at 47.3 percent of revenues,” said Salil Parekh, CEO and MD.
“Increase in revenue and margin outlook for FY21 is due to the continued trust clients have in us,” he added.
Infosys has revised its revenue growth guidance upward to 2-3 percent in constant currency for financial year 2020-21, from 0-2 percent earlier. The full year operating margin guidance also revised upward to 23-24 percent, against 21-23 percent earlier.
The full year revenue guidance was better than analysts expectations which was pegged at 1-3 percent. Company signed $3.15 billion worth of deals, the highest ever, during July-September period, against $1.74 billion in June quarter.
“The strength and resilience of Infosys was fully visible in Q2 with operating metrics witnessing a healthy increase, broad-based growth, highest ever large deal TCV at $3.15 bn and attrition reducing to single digits,” said Pravin Rao, COO.
“As a recognition of employees’ stellar performance, we are giving 100 percent variable pay along with a special incentive for Q2. Additionally, we are rolling out salary increases and promotions across all levels effective January 1,” he added.
Numbers were ahead of CNBC-TV18 poll estimates. Profit had estimated at Rs 4,534 crore on revenue at Rs 24,160 crore, while dollar revenue expectations were at $3,257 million for the quarter.
Digital revenues for Q2 at $1,568 million (47.3 percent of total revenues) increased 12.9 percent sequentially and 27.5 percent year-on-year, company said.
Infosys added 5 clients in $100 million band, taking total to 30 clients, while it added 6 clients in $10 million category and 16 clients in $1 million band. Total active clients stood at 1,487 at the end of September 2020, increased from 1,458 clients in June quarter.
Operating profit for the September quarter at Rs 6,228 crore increased by 16.1 percent and margin at 25.4 percent expanded by 270 bps QoQ, which both were ahead of CNBC-TV18 poll estimates of Rs 5,546 crore and 23 percent respectively.
“Our relentless efforts on cost optimisation and strengthening operational efficiencies helped by certain cost deferrals led to 270 bps sequential improvement in operating margin and a 300 bps improvement in H1 margins,” said Nilanjan Roy, CFO.
Voluntary attrition (annualized – IT services) rate declined significantly to 7.8 percent in September quarter, from 11.7 percent in June quarter and 18.3 percent in year-ago period.
Infosys declared an interim dividend of Rs 12 per equity share, which increased by 50 percent.
The stock gained 37 percent during the September quarter, and 49 percent since June quarter earnings till date.
News Source:- Moneycontrol