Infosys Q2 profit climbs 12%, ups revenue guidance

Infosys Ltd has reported an increase of almost 12% in consolidated net profit for the July-September quarter, as revenue jumped and it added more clients than a year earlier.

India’s second-largest software services exporter posted a net profit of Rs 5,421 crore for the quarter ended September 2021, up from Rs 4,845 crore in the same period last year. Profit rose 4.4% from the April-June quarter.

Consolidated revenue surged by a fourth to Rs 29,602 crore from Rs 24,570 crore a year earlier and rose 6.1% from Rs 27,896 crore in the previous quarter.

In dollar terms, the company’s revenue increased 19.4% from a year earlier and 6.3% from the previous quarter in constant currency.

Infosys benefited as revenue from a deal with Daimler, signed in December last year, started kicking in. The Indian company is helping Daimler transform its IT operating model and infrastructure in a multi-billion-dollar deal.

The company also raised its revenue guidance from 14-16% to 16.5-17.5%. It kept its margin guidance unchanged at 22-24%.

Other key details:

1) Infosys had a total of 1,714 clients at the end of September, up from 1,487 a year earlier.
2) It added 117 clients during Q2, compared with 96 in the same period last year.
3) The company now has 35 clients in $100-million-plus band and 62 in $50-million-plus.
4) Infosys had 2,79,617 employees as of September-end, up from 240,20 a year earlier.
5) Attrition rate jumped to 20.1% from 12.8% as hiring activity in the IT sector surged.
6) Operating margin came in at 23.6% in Q2, a decline of 1.8% YoY and 0.1% QoQ.

Management Commentary:

Infosys CEO and managing director Salil Parekh said the company’s “stellar performance” and “robust growth outlook” continue to demonstrate its strategic focus and the strength of its digital offerings.

Parekh said Infosys is witnessing a strong market opportunity with global enterprises rapidly accelerating their digital journeys.

He added that the company’s sustained investments in expanding capabilities, including the differentiated cloud play, has uniquely positioned it to emerge as the preferred cloud and digital transformation partner.

“Given this continued momentum we have further increased our revenue growth guidance to 16.5-17.5%,” he added.

Chief operating officer Pravin Rao said Infosys is expanding its college graduates hiring programme to about 45,000 for the year. He added that the company is preparing to embrace the hybrid work model as more than 86% of its employees in India had received at least one dose of Covid-19 vaccine.