Infosys Q2 Results: Consolidated PAT Jumps To Rs 6,212 Crore; Constant-Currency Revenue Growth At 2.3% QoQ

After its rival TCS, the second largest IT company in the country in terms of market share, Infosys has also delivered its financial report for the September 2023 quarter of FY24 was broadly in line with Street's expectations. Infosys posted a consolidated net profit of Rs 6,212 crore which is attributable to the owners of the company, registering a growth of 4.5% QoQ and 3.2% YoY. However, Infosys sees its top-line front under pressure ahead as it trims the upper-end of constant currency revenue growth guidance.

The company's net profit stood at Rs 5,945 crore in the June 2023 quarter and Rs 6,021 crore in the September 2022 quarter.

Meanwhile, in Q2FY24, operating profit stood at Rs 8,274 crore, rising by 4.8% QoQ and 5.1% YoY. Operating margins also expanded sequentially by 0.4% to 21.2% compared to 20.8% in Q1FY24, however, contracted by 0.3% from 21.5% in Q2FY23.

On operating margins, Nilanjan Roy, CFO said, it "demonstrates the early benefits of recently unveiled margin improvement plan and is a clear reflection of our ability to continuously identify opportunities for improving operational efficiencies."

Consolidated revenue stood at Rs 38,994 crore in the quarter under review, posting a growth of 2.8% from Rs 37,933 crore in Q1FY24 and also climbed 6.7% from revenue of Rs 36,538 crore in Q1FY24.

Further, in the quarter, in constant currency, Infosys delivered $4,718 million in Q2 revenues with year-on-year growth of 2.5% and sequential growth of 2.3% in constant currency. Large deal TCV for the quarter was $7.7 billion, with a net new of 48%. Also, attrition declined further to 14.6%. FY24 revenue guidance revised to 1.0%-2.5% and operating margin guidance retained at 20%-22%

Salil Parekh, CEO and MD said, "We had our highest large deals value at $7.7 billion in Q2 spread across all verticals and geographies. This, in an uncertain macro-environment, is a testament to our ability to pivot and stay relevant to the
evolving client needs, by delivering the benefits of transformation as well as productivity and cost savings
at scale."

Parekh further said, "Strong H1 performance with significant large deal wins, builds a solid foundation for the future. The growing adoption of our Generative AI offering, Topaz, is helping us deliver consistent value and expand market share."

For the full-year FY24, Infosys trimmed its upper-end of constant currency revenue growth to 3.5% from the previous 2.5%. Overall, the company expects CC revenue growth to be in the range of 1-2.5% from earlier 1-3.5%. However, it maintained its EBIT margin guidance in the range of 20-22% growth.

On BSE, ahead of the Q2 report, Infosys shares ended at Rs 1452 apiece, down by Rs 2.79% on BSE. Infosys shares will react to Q2 numbers on Friday.

Infosys' market value was over Rs 6.02 lakh crore as of October 12, 2023, making it the second largest Indian tech firm after Tata Group-backed flagship company TCS.

Apart from this, Infosys has also declared an interim dividend of Rs 18 per share. It fixed October 25, 2023, as record date for the interim dividend and November 6, 2023, as payout date.

Also, the board of directors in a meeting held on October 12, appointed Nitin Paranjpe as an additional & independent director effective January 1, 2024, for a period of 5 years, subject to the approval of shareholders.

Another big development was the five-year extension
of its successful joint venture collaboration with Temasek, a global investment firm headquartered in Singapore. Their Infosys-Temasek joint venture (JV) company has collaborated with large corporations in Southeast Asia on their digital transformation journeys, leveraging its deep technology expertise across cloud, data and analytics, cybersecurity, digital, artificial intelligence (AI) and automation, among others.

This extension of JV underscores iCompaz's commitment to growing its presence in Singapore and the broader Southeast Asian market. The region is one of the fastest-growing economies in the world and is a key growth market. iCompaz, which was formed in 2018, has collaborated with Temasek on its technology transformation initiatives such as deploying new digital architecture, data applications and security infrastructure.