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Infosys beats street estimates, 6 takeaways from Q2 scorecard

Infosys has revised its revenue growth guidance from 0-2 percent to 2-3 percent in constant currency for the financial year 2020-21.

October 15, 2020 / 03:19 PM IST

India's second-largest software services provider Infosys on October 14 posted a consolidated profit of Rs 4,845 crore for the September quarter against Rs 4,019 crore in Q2FY21.

Numbers were ahead of CNBC-TV18 poll estimates. Profit was expected at around Rs 4,534 crore on revenue of Rs 24,160 crore, while dollar revenue expectations were at $3,257 million for the quarter.

"The strength and resilience of Infosys was fully visible in Q2 with operating metrics witnessing a healthy increase, broad-based growth, highest ever large deal—TCV at $3.15 billion—and attrition reducing to single digits," said Pravin Rao, COO.

Here are 6 key takeaways from Infosys' July-September quarter earnings:

The numbers: Net profit jumped 20.5 percent year on year (YoY) to Rs 4,845 crore while revenue came at Rs 24,570 crore, up 8.6 percent YoY. Q2 revenues grew sequentially by 4 percent in constant currency.

Operating profit for the quarter came at Rs 6,228, 26.8 percent higher YoY while operating margin came at 25.3 percent for Q2FY21 against 21.7 percent for Q2FY20, up 370 basis points YoY.

Read more: Infosys Q2 beats estimates with 14.4% profit growth

Client wins: The company said it sealed several deals and won many clients during the quarter. Some of them were:

Consolidated Edison Company (Con Edison) selected Infosys to digitally transform its customer service capabilities over the next four years.

Essential Utilities picked Infosys as a strategic partner to drive its digital transformation.

The National Bank of Bahrain (NBB) selected Infosys Finacle for the digital transformation of its transaction business.

Dividend: The company declared an interim dividend of Rs 12 per equity share and fixed October 26, 2020, as the record date for interim dividend and November 11, 2020, as the payment date.

Revenue guidance: Infosys has revised its revenue growth guidance upward to 2-3 percent in constant currency for the financial year 2020-21 from 0-2 percent. The full-year operating margin guidance also revised upward to 23-24 percent from 21-23 percent.

The full-year revenue guidance was better than analysts' expectations pegged at 1-3 percent. The company signed $3.15 billion worth of deals, the highest ever, during the July-September period, against $1.74 billion in the June quarter.

Headcount: At the end of the September quarter, Infosys had 2,40,208 employees against 2,39,233 employees QoQ and 2,36,486 employees YoY.

Voluntary attrition rates also declined. It stood at 7.8 percent in the September quarter against 11.7 percent in the previous quarter and 18.3 percent YoY.

Revenue segments: During Q2FY21, the hi-tech saw segment saw a 24.4 percent YoY jump in revenue. Life Sciences grew 9.3 percent YoY.

In terms of geography, India saw a 15.8 percent YoY jump in revenue, while Europe and North America saw 4 percent and 2.1 percent YoY growth, respectively.

Moneycontrol News
first published: Oct 14, 2020 05:19 pm