Infosys Ltd, India’s second largest IT services provider, on April 13 reported a consolidated net profit of Rs 5,686 crore for the fourth quarter ended March 2022, registering an on-year growth of 12 percent. On a sequential basis, the profit has declined by 2 percent.
The Bengaluru-based IT company had reported a consolidated profit after tax (PAT) of Rs 5,076 crore during the corresponding period a year ago, while PAT in the last quarter stood at Rs 5,809 crore.
The revenue for Infosys during the reported quarter recorded a 23 percent growth over the year-ago period to Rs 32,276 crore. On a quarterly basis, the growth has been 1 percent.
The company had reported consolidated revenues of Rs 26,311 crore during the corresponding quarter last year. Its revenues during October – December period came in at Rs 31,867 crore.
For the full year period (April-March 2022), the consolidated profit was recorded at Rs 22,110 crore, which is a growth of 14 percent from a profit of Rs 19,351 crore reported for FY21.
Consolidated revenues for FY22 stood at Rs 121,641 crore, a 21 percent rise from the revenues of Rs 100,472 crore reported for FY21.
Differentiated cloud services and large deal momentum enabled Infosys to achieve its highest annual growth in a decade. Supply side challenges and higher visa costs, however, have dented the margins for the company.
Infosys reported $16.3 billion in revenues for FY22 with the highest annual growth in the last decade of 19.7 percent in constant currency. On a sequential basis, the growth was 1.2 percent in constant currency.
“Infosys delivered highest annual growth in a decade with broad-based performance driven by deeply differentiated digital and Infosys Cobalt led cloud capabilities, powered by ‘One Infosys’ approach as we continue to gain market share as a result of sustained clients’ confidence in our ability to successfully navigate their digital journeys”, Salil Parekh, CEO and MD, said.
“With the acceleration of digital disruptions across industries, we see immense potential to engage and partner with clients as they transform, adapt and thrive”, he added.
The company’s revenues for the quarter in constant currency terms grew by 20.6 percent on year and by 1.2 percent on quarter. For the full year, the constant currency revenues witnessed a YoY growth of 19.7 percent.
Reported revenues in dollar terms for the quarter came in at $4,280 million with an annualized growth of 18.5 percent. Full year dollar revenues were recorded at $16,311 million with a YoY growth of 20.3 percent.
Deal TCV
Infosys signed large deal TCV worth $ 2.3 billion during the quarter thereby taking to total of large deal TCV for FY22 to $ 9.5 billion.
Revenues by offerings, business segments & geographies
Offerings
The company generated revenues worth $2,532 million from its digital offerings with a YoY growth of 36.2 percent and a sequential growth of 2 percent. Revenues from digital business constituted 59.2 percent of its total dollar revenues.
The core business generated $1,748 million revenues during the quarter.
Business Segments
The financial services segment contributed 31.3 percent to the total revenues for the company with a YoY growth of 12.4 percent. Contribution from retail was 14.3 percent, a growth of 14.3 percent. Communications business contributed 12.8 percent with a YoY growth of 26.4 percent. Energy & Utility business grew by 15.7 percent to contribute 12 percent to the total revenues while Manufacturing segment grew the most by 45.3 percent on year to increase its contribution to 11.8 percent. Hi-tech, Lifesciences and others contributed 8.2, 6.6 and 3 percent respectively.
Geographies
The geographical distribution of revenues was stable on both the quarter as well as annualized basis. North America which is the largest contributor to the company’s business with 61.4 percent revenue share grew at a healthy 18.2 percent on year. Europe grew at 22.2 percent while maintaining its share of 25.2 percent in revenues. India’s share in total business stood at 3.2 percent with an on year growth of 25.9 percent while Rest of the world grew by 9.6 percent to generate 10.2 percent of company’s revenues.
Client Matrix
The company had 1,741 active clients at the end of FY22 with the top 5 clients contributing 11.8 percent of the revenues, top 10 clients contributed 19.4 percent of the total revenues and 35.4 percent of the total revenues came from top 25 clients.
Margins
The supply side pressures continue to make a dent in the margins of the company.
The gross margin for the quarter stood at 31 percent which is a 400 bps decline on year. The gross margin in the previous quarter were registered at 33 percent.
On a full year basis, the gross margins were 200 bps lower compared to previous year at 33 percent.
The operating margins were also impacted and declined by 300 bps on year to 21.5 percent. On a sequential basis the decline was 200 bps. On a full year basis, the decline in operating margin was 150 bps at 23 percent.
“In a year marked by intense supply side challenges, Infosys delivered strong financial performance – EPS growth of 15.2 percent, free cash flows surpassing $3 billion and return on equity of 29.1 percent, reflecting the company’s success, driven by client-centricity and rich capabilities”, said Nilanjan Roy, Chief Financial Officer.
Guidance for FY23
As expected the company has given a revenue growth guidance of 13-15 percent for FY23 and operating margin guidance of 21-23 percent.
Employee Matrix
The company had 3,14,015 employees on its rolls at the end of FY22. The employee strength at the end of Q3FY22 stood at 2,92,067. Women employees constituted 39.6 percent of the total employee strength.
The attrition for the company during the quarter spiked to 27.7 percent compared to 25.5 percent during Q3FY22.
Revenue generation per employee was stable at $ 57,700 during the quarter as compared ot $ 57,900 in the previous quarter.
DSO
The company was able to improve upon its collection efficiency as it was able to reduce its DSO (days sales outstanding) to 67 days from 71 days in the same quarter last year and also the previous quarter.
Free Cash Flow
The company generated Rs 5,769 crore in free cash flow during the quarter as compared to Rs 5,399 crore generated in the previous quarter.
Dividend
Infosys recommended a final dividend of Rs 16/- per equity share for the financial year ended March 31, 2022. The record date for the payment of final dividend is June 1, 2022and the dividend will be paid on June 28, 2022.
The Infosys stock closed with a gain of Rs 6.10 at Rs 1,748.55 on April 13 at the National Stock Exchange. The stock has been trading lower by 4.0 percent in the past one month and has generated returns of 25.2 percent during the past one year.
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