Infosys Q4 Results: Growth Stutters As Margin Pressure Aggravates
The software services exporter’s revenue increased 1.28% sequentially to Rs 32,276 crore in the three months through March.
Infosys Ltd.’s revenue rose in the fourth quarter on deal wins and increased client spending on digital services, helping the IT company to meet its own growth estimates for the full fiscal.
The software services exporter’s revenue increased 1.28% sequentially to Rs 32,276 crore in the three months through March, according to its exchange filing. That compares with the Rs 32,726.9-crore consensus estimates of analysts tracked by Bloomberg.
Its revenue growth for the fiscal ended March stood at 20.3%. Infosys had guided for 19.5-20% revenue growth for FY22. For 2022-23, it expects growth to be at 13-15%.
"The revenue guidance of 13-15% is a good guidance," said Salil Parekh, managing director and chief executive officer at Infosys.
The company forecasts operating profit margin at 21-23% for FY23. "We are comfortable in maintaining this band," said Nilanjan Roy, chief financial officer at Infosys. "As we get into discussion with the clients during renewals, we will look at pushing the margins."
Infosys Highlights Q4 FY22 (QoQ)
Revenue in U.S. dollar terms rose 0.7% to $4,280 million.
Revenue growth in constant currency terms stood at 1.2%.
Net profit fell 2.12% to Rs 5,686 crore, against the Rs 5,968-crore forecast.
EBIT margin stood at 21.5% against 23.5% in Q3.
Business Environment
The IT company’s growth remained broad-based. Deal momentum, too, was robust in Q4, with digital transformation rapidly scaling across verticals and regions.
Infosys won deals worth $2.3 billion in the January-March period compared with $2.53 billion in the previous three months. The company won 25 large deals and these were diversified, said Parekh.
Attrition rate rose to 27.7% from 25.5% as of December. The attrition for the quarter has come down by 5%. The tail effect will see the attrition rise for the next few quarters.
The company net added 85,000 employees in FY22. It plans to hire upwards of 50,000 employees in FY23, said Roy.
Infosys’ peer Tata Consultancy Services Ltd., too, saw its revenue rise in the fourth quarter on order wins. Attrition at the nation’s largest IT company also jumped.
Segment-Wise Revenue
Lifesciences saw a fall in revenue over the previous quarter, while all other key segments witnessed growth. Revenue growth for the BFSI and retail segment were flat.
Shares of Infosys closed 0.4% higher before the results were announced on Wednesday, compared with a 0.3% gain in the benchmark Nifty 50.