Infosys Q2 Results: Consolidated PAT Jumps 5% YoY To Rs 6,506 Crore; FY25 Revenue Guidance In CC Raised

India's second-largest IT company, Infosys missed estimates in the second quarter of FY25, however, raised its FY25 guidance on an expected line. In Q2FY25, Infosys reported a consolidated net profit after minority interest, of Rs 6,506 crore registering a growth of 4.7% YoY and 2.2% QoQ. Consolidated revenue surged by 5.1% YoY and 4.2% QoQ to Rs 40,986 crore.

On segment-wise revenue, in constant currency, Infosys posted 2.3% YoY growth in financial services, while 7% growth was recorded in communication, 10.9% growth in Energy, Utilities, Resources & Services, and 12.3% growth in manufacturing making it the star-performer. Also, Hi-Tech business CC revenue growth was at 6% YoY. But Infosys saw a decline of 9.6% YoY in retail business, and 3.5% in life sciences.

On a geographical basis, the company posted 15.5% growth YoY in constant currency in the European market, while the growth was the strongest at 16% YoY in Indian business. In the rest of the world, Infosys posted CC revenue growth of 3.8%. However, the US market remains under pressure as it posted a decline of 2.7% YoY in North America.

In the quarter, the tech player delivered broad-based growth performance with $4,894 million in Q2 revenues, sequential growth of 3.1% and year-on-year growth of 3.3% in constant currency.

While operating margin for Q2 was at 21.1%. Free cash flow for Q2 was at $839 million, growing 25.2% year on year. TCV of large deal wins was $2.4 billion, 41% being net new.

On the performance, Salil Parekh, CEO and MD said, "We had strong growth of 3.1% quarter-on-quarter in constant current in Q2. The growth was broad-based with good momentum in financial services. This stems from our strength in industry expertise, market leading capabilities in cloud with Cobalt and generative AI with Topaz, resulting in growing client preference to partner with us."

Parekh added, "Our large deals at $2.4 billion in Q2 reflect our differentiated position. I am grateful to our employees for their unwavering commitment to our client as we further strengthen our market leadership."

Overall, its constant currency revenue was up by 3.3% YoY and 3.1% QoQ in Q2FY25. While operating margins dipped by 0.1% YoY and were flat sequentially to 21.1%.

Jayesh Sanghrajka, CFO said, "We continue to focus on accelerating revenue growth with a sharp focus on margin performance. Operating margins for the quarter were at 21.1%, driven by continued benefits from value-based pricing and utilization despite higher employee payouts. Our focus on cash generation resulted in another quarter of over 100% Free Cash Flow conversion to net profits."

For FY25, Infosys raised its revenue growth guidance in constant currency to 3.75% to 4.5% from its earlier target of 3-4%. While operating margin guidance was retained at 20-22%.

On BSE, Infosys share price stood at Rs 1969.50 apiece, up by 2.6% on Thursday with a market cap of Rs 8,17,765.32 crore. The stock neared its 52-week high of Rs 1,990.90 apiece.

Apart from this, in a board meeting on October 17, Infosys' board members approved merger of WongDoody Inc (wholly owned subsidiary) and Blue Acorn iCi Inc, Outbox Systems Inc., d.b.a Simplus and Kaleidoscope Animations Inc (step-down subsidiaries) with Infosys Nova Holdings LLC (wholly owned subsidiary).