As Infosys navigates FY25, the company is set to implement several levers such as lean automation and strategic hiring to drive margin growth. The Bengaluru-based company's operating margin was up 30 basis points (bps) to 21.1 percent in Q1. Infosys retained its operating margin guidance at 20-22 percent for the financial year.
According to Infosys, several pillars of Project Maximus are actively contributing to margin improvements. Project Maximus is a margin improvement plan which is aimed at optimising costs.
Through this plan, Infosys aims to offset headwinds and drive profitability in the medium term going forward, the company said.
Also Read | Clients willing to have pricing discussions due to onsite inflation, says Infosys CFO
"Outside of that, our margins are going to be dependent on... revenue and volume growth which helps us flatten our pyramid and therefore benefit from the pyramid," Parekh told analysts after declaring the results on July 18.
Pyramid rationalisation means having a larger number of employees with less experience and fewer employees with more experience, resulting in reduced salary bills.
Another key lever is the strategic hiring of freshers. "This would help in getting some better role ratios or better role mixers," Infosys said in a post-earnings conference call.
Also Read | Infosys to hire 15,000-20,000 freshers in FY25
One of the significant levers for Infosys is lean automation. Infosys' lean automation is a strategic approach that combines principles of lean manufacturing and process improvement with automation technologies to enhance efficiency, reduce waste, and improve overall productivity.
Infosys' results for Q1 FY25 showed that the company's consolidated net profit for the June quarter fell 20.1 percent QoQ to Rs 6,368 crore, primarily due to a tax refund boost in the previous quarter. Revenue, however, increased by 3.7 percent QoQ to Rs 39,315 crore.
Annually, Infosys's net profit rose by 7.1 percent, and revenue grew by 3.6 percent. Both figures exceeded Moneycontrol's estimates of Rs 6,248 crore for net profit and Rs 38,850 crore for revenue.
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