India’s second-largest IT company Infosys reported a 3 percent year-on-year (YoY) rise in net profit at Rs 6,212 crore in the second quarter of FY24. This was in above Moneycontrol’s poll estimates of Rs 6,156 crore.
Infosys narrowed its revenue growth guidance for the full year at the upper end and has now guided for revenue growth of 1-2.5 percent for the full year. This comes after it sharply slashed the guidance last quarter to 1-3.5 percent from 4-7 percent.
Consolidated revenue for the quarter came in at Rs 38,994 crore up 7 percent. Revenues for the quarter were above analyst estimates of Rs 37,694 crore. The IT major revised its FY24 revenue guidance to 1 percent from 2.5 percent.
In constant currency terms, the revenue grew by 2.5 percent YoY, beating estimates.
The EBIT margin or the operating margin was up 40 bps to 21.2 percent, thanks to a weaker rupee and the company not rolling out wage hikes so far. The company retained its operating margin guidance of 20-22 percent.
Infosys declared an interim dividend of Rs 18 per share for FY24.
“We had our highest large deals value at $7.7 billion in Q2 spread across all verticals and geographies. This, in an uncertain macro-environment, is a testament to our ability to pivot and stay relevant to the evolving client needs, by delivering the benefits of transformation as well as productivity and cost savings at scale," said Salil Parekh, CEO and MD.
“Strong H1 performance with significant large deal wins, builds a solid foundation for the future. The growing adoption of our Generative AI offering, Topaz, is helping us deliver consistent value and expand market share,” he added.
Chief Financial Officer Nilanjan Roy said in a statement that the operating margin demonstrates 'the early benefits of recently unveiled margin improvement plan and is a clear reflection of our ability to continuously identify opportunities for improving operational efficiencies.”
The IT major only reports the total contract value of its large deals, and reported a TCV of $7.7 billion, which is a huge uptick from last quarter’s $2.3 billion. The company has announced three large deals this quarter: an agreement with an existing client to provide AI and automation-led development, modernisation and maintenance services, where the spend would be $2 billion over five years, a $1.5 billion deal with Liberty Global over five years and an MoU that was signed for $1.5 billion where the spend is over 15 years.
The company has also appointed Nitin Paranjpe, Chief Transformation Officer and Chief People Officer of Unilever, to the board.
Shares of the company ended the day down by 2.26 percent to Rs 1,460.
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