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Last Updated : Jul 12, 2019 06:02 PM IST | Source: Moneycontrol.com

Infosys net profit down 6.8% QoQ, albeit beats Q1 estimates - here are the top 10 takeaways

Infosys reported a net profit of Rs 3,802 crore for the quarter ended June 30, while rupee revenue rose marginally to Rs 21,803 crore.

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Infosys reported better-than-expected results in June quarter on July 12. The IT major beat analysts’ estimates in terms of the top line, the bottom line as well as on the margin front.

Shares of Infosys closed 0.7 percent higher at Rs 726 on the NSE.

We have collated a list of top 10 takeaways from Infosys Q1 results:

Net Profit

Infosys reported a net profit of Rs 3,802 crore for the quarter ended June 30 which was slightly better than CNBC-TV18 poll of Rs 3,702 crore for Q1FY20 It rose 5.3 percent on a year-on-year (YoY) basis but fell 6.8 percent sequentially.

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Rupee Revenues

The rupee revenue rose marginally to Rs 21,803 crore which was higher than CNBC-TV18 poll of Rs 21,776 crore for the quarter ended June 30. It rose 1.2 percent on a sequential basis, while on a YoY basis, the rise was about 14 percent.

Dollar Revenues

Dollar revenue grew by 2.3 percent on a QoQ basis to $3,131 million for the June quarter. The revenue growth was slightly lower than the CNBC-TV18 estimate of $3,134 million.

Guidance

Infosys increased FY20 revenue growth guidance range to 8.5-10 percent in constant currency. The company maintained FY20 operating margin guidance range of 21-23 percent.

“We had a strong start to FY20 with constant currency growth accelerating to 12.4 percent on a year-over-year basis and digital revenue growth of 41.9 percent. This was achieved through our consistent client focus and investments which have strengthened our client relationships,” said Salil Parekh, CEO, and MD at Infosys.

“Consequently, we are raising our revenue guidance for the year from 7.5-9.5 percent to 8.5-10 percent,” he said.

Digital Revenues

Q1FY20 digital revenues stood at $1,119 million (35.7 percent of total revenues), i.e. year-on-year growth of 41.9 percent and sequential growth of 8.6 percent in constant currency.

Digital revenues as a percentage of total revenues grew from 33.8 percent in the March quarter to 35.7 percent in quarter ended June 30.

Margin

Infosys' margin stood at 20.5 percent for the quarter ended June 30, which was better than CNBC-TV18 poll of 20.2 percent. However, it fell on a sequential basis. Infosys margin stood at 21.44 percent in the previous quarter.

Revenue by Business Segment

Most of the business segments witnessed growth in the June quarter. Double-digit YoY growth was seen in communications, Energy-Utilities-resource-services, manufacturing, and Hi-Tech.

Revenues by Client Geography

Revenues from India contracted by 1.1 percent on a YoY basis, while it grew 13.5 percent on a YoY basis in the June quarter for North America, followed by Europe which saw a gain of 7.2 percent on a YoY basis, and revenues from rest of the world grew by 5.9 percent in the same period.

Large Deal Signings

Infosys signed a deal worth $2.7 billion.

“We had a good quarter as we continue to leverage our digital navigation framework to help our clients build and nurture their live enterprise,” said Pravin Rao, COO at Infosys.

“Large deal TCV was highest ever at $2.7 billion. Segment growth was robust with all large regions and most verticals growing at double digits on YoY basis in constant currency,” he said.

Buyback
The company is on track towards completing its previously announced share buyback of Rs 8,260 crore. The company has to date bought back shares worth Rs 5,934 crore. The company’s current policy is to pay up to 70 percent of the free cash flow annually by way of dividend and/or buyback.
First Published on Jul 12, 2019 05:29 pm
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