Infosys Q2 Results: Growth Guidance For FY22 Raised As Large Deals Boost Revenue
Infosys Ltd. raised its growth forecast as revenue in the September-ended quarter rose, aided by large deal wins and increased spending by clients.
Revenue rose 6.1% sequentially to Rs 29,602 crore in the three months through September, according to the Bengaluru-based company's exchange filing. Analyst estimates compiled by Bloomberg pegged the metric at Rs 29,365.8 crore.
In U.S. dollar terms, revenue rose 5.7% to $3,998 million.
Sequential revenue growth in constant currency terms stood at 6.3%.
Infosys raised its revenue growth estimate to 16.5-17.5% for the ongoing fiscal from 14-16% earlier. It, however, maintained operating profit margin forecast at 22-24%.
Net profit rose 4.4% to Rs 5,421 crore against the Rs 5,288-crore Bloomberg forecast.
Ebit increased 5.6% to Rs 6,972 crore against Rs 6,636.7-crore analyst consensus.
Ebit margin contracted 10 basis points to 23.6%, owing to supply-side challenges and wage hikes.
Deal wins and client investment towards cloud computing, artificial intelligence and internet of things have helped the Indian IT companies rebound during the pandemic. It was no different for the Bengaluru-based Infosys in the second quarter even as the momentum of large deal wins slowed.
Attrition rate rose to 20% from 13.9% in the first quarter. The company has increased the guidance to hire from campuses to 45,000 from 35,000 in the ongoing fiscal.
The company won 22 deals worth $2.15 billion in the July-September period, compared with $2.6 billion in the prior quarter.
"Our stellar performance and robust growth outlook continue to demonstrate our strategic focus and the strength of our digital offerings," said Chief Executive and Managing Director Salil Parekh in a media statement. "Given this continued momentum we have further increased our revenue growth guidance to 16.5%-17.5%."
Mega deals aren't predictable though they're there in the market, Parekh said. Infosys classifies deals worth over $50 million as "large" and those above $100 million as "mega".
The company's manufacturing segment grew the most, at 19.1%, led by the deal with Daimler. Its BFSI and retail segments, too, grew over the preceding quarter.
Infosys will change its management structure by the end of December as its chief operating officer, Pravin Rao, retires. The company will disclose the new structure by the year-end.
Shares of Infosys closed 1.42% higher ahead of the results while the benchmark BSE Sensex ended 0.75% up.