Infosys, the country's second-largest IT services exporter, clocked better-than-expected top line and bottom line growth in the quarter ended December, although operating performance was slightly below analyst estimates.
Here are 10 key highlights from its quarterly scorecard:
1) Bottom line
The IT services company reported a 9.4 percent sequential growth in consolidated profit at Rs 6,586 crore, above the CNBC-TV18 poll estimate of Rs 6,480 crore.
Year-on-year growth in the bottom line was 13.4 percent. Earnings were partly led by higher other income, which grew by 33 percent QoQ and 50 percent YoY.
2) Top line
Consolidated revenue was Rs 38,318 crore, increasing 4.9 percent sequentially and 20.2 percent YoY and beating analyst estimates.
In dollar terms, revenue grew by 2.3 percent QoQ and 9.6 percent YoY to $4.66 billion, with constant currency top line growth at 2.4 percent and 13.7 percent, respectively.
According to the average of estimates of analysts polled by CNBC-TV18, revenue was expected at Rs 37,918 crore and dollar revenue at $4.62 billion with constant currency growth of 1.2 percent on a sequential basis.
Also read: Infosys Q3 Net profit surges 13% to Rs 6,586 crore, beats estimates; deal wins at $3.3 bn
Year-on-year growth was in double digits for most business segments and geographical regions in constant currency terms.
"Revenue growth was strong in the quarter, with both digital business and core services growing. This is a clear reflection of our deep client relevance, industry-leading digital, cloud, and automation capabilities, and the unrelenting dedication of our employees”, CEO Salil Parekh said.
3) Digital Business and Deal Wins
Digital business comprised 62.9 percent of overall revenue and grew 4 percent sequentially to Rs 2,930 crore. The year-on-year growth was 17.8 percent and in constant currency, it increased 21.7 percent.
The total contract value of large deals was the strongest in eight quarters at $3.3 billion, against $2.7 billion in the previous quarter.
"As reflected in the large deals momentum, we continue to gain market share as a trusted transformation and operational partner for our clients," Parekh said. "Our end-to-end capabilities and global scale make us a preferred choice as clients look at consolidating vendors. We remain focused on helping businesses accelerate their digital agenda to uncover new value and growth, as well as improve operational and cost effectiveness."
4) Full-Year Guidance
Infosys revised its full-year (FY23) revenue growth guidance to 16-16.5 percent from 15-16 percent earlier, with strong deal wins.
Its full-year EBIT margin guidance was unchanged at 21-22 percent.
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5) Operating Performance
Operating margins remained resilient due to cost optimisation benefits which offset the impact of seasonal weakness in operating parameters, chief financial officer Nilanjan Roy said.
The IT services company, with more than Rs 6.2 lakh crore market capitalisation, reported consolidated EBIT (earnings before interest and tax) at Rs 8,242 crore, growing 4.7 percent sequentially and 10.1 percent on-year.
EBIT margin at 21.5 percent for the quarter was unchanged compared to previous quarter but fell 2 percentage points from a year-ago period.
The numbers came in below CNBC-TV18 poll estimates of Rs 8,298 crore and 21.8 percent, respectively.
6) Business Segments Performance
In constant currency terms, Infosys reported 5.5 percent YoY growth in the financial services segment and 12.7 percent growth each in retail and communications.
The company’s energy, utilities, resources & services division registered 25.9 percent on-year growth, while the manufacturing segment grew 36.8 percent.
The hi-tech and life sciences businesses clocked 10.4 percent and 5 percent growth, respectively, compared to a year ago.
7) Revenue by Geography
Infosys said business from North America grew 10.5 percent on-year in constant currency terms, and the Europe region clocked 25.3 percent growth.
The contribution of the rest of the world was also strong, reporting 11.9 percent on-year growth, although the India business underperformed other geographies, registering a 5.4 percent decline on-year.
Active clients at the end of December grew 4 percent to 1,850 from the previous quarter and 6.4 percent from a year ago.
The company added 17 clients in the $1 million+ category, 13 clients in the $10 million+ band and two clients in the $50 million+ section. It lost one client in the $100 million+ category.
8) Headcount
Infosys had 346,845 employees at the end of December compared with 345,218 at the end of September. The number of women employees as a percentage of the total was 39.4 percent against 39.3 percent in the previous quarter.
9) Attrition Rate
Roy said the attrition rate reduced meaningfully during the quarter ended December and is expected to decline further in the near term.
The attrition rate at 24.3 percent for the quarter dropped from 27.1 percent in the September quarter and 25.5 percent in the year-ago period.
10) Capital Allocation
Infosys started buying back shares through the open market route on December 7, 2022, and will continue till June 6, 2023.
Till date, it has bought back 31.3 million shares worth Rs 4,790 crore, or 51.5 percent of the total authorisation of Rs 9,300 crore, at an average price of about Rs 1,531 per share, which is lower than the maximum buyback price of Rs 1,850 per share.
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