IGI Logo

* The company reported good set of numbers for the quarter under review, revenue from operations increased by 23.4% year-on-year to ?365,380 million on consolidated basis. In Constant currency, revenue increased by 18.8% YoY led by digital offerings which grew by 31.2% YoY. Double digit growth in constant currency was broad based with all the industries showing the same. Revenue from core offerings increased by 3%. Revenue from digital offerings constituted 61.8% of the total revenue and the balance 38.2% from core offerings . The company achieved large deals in Q2, totaling $2.7 billion highest in the last seven quarters, 54% of this is net new.

* Business segment wise, the company reported healthy revenue growth led by all business segments. Financial Services, Retail, Communication, Energy Utilities, Manufacturing, Hi-Tech, Life sciences & Other verticals which grew YoY by 11.5%, 15.4%, 18.4%, 24.3%, 45%, 9.9%, 10.3% & 56.6% respectively in constant currency.

* Operating margin stood at 21.5% this quarter i.e. and increase of 150 basis points QoQ of which 70 basis points was due to rupee depreciation, 90 basis points from cost optimization including large deal wins, 40 basis points due to reduction in sub-contraction which was offset with 40 basis points increase in compensation related increase and its impact.

* On profitability front, the EBITDA from operations for the quarter improved by 13.7% year-on-year at ?89,020 million with a margin of 24.4%. The company achieved the reported PAT of ?60,260 million, a growth of 11% year-on-year with a net margin of 16.5% translating into EPS of ?14.34 per share.

* On EPS front, there is an increase of 11.5% year-on-year to ?14.34 (?12.85 in Q2FY22) as compared to an increase of 4.4% year-on-year in previous quarter.

* Employee attrition decreased to 27.1% this quarter as compare to 28.4% previous quarter. Infosys continues investments in talent through hiring and competitive compensation revisions. This will impact margins in the immediate term, it is expected to reduce attrition levels. Net hiring was 10,032 employees during the quarter. Attrition rate is decreasing quarter on quarter and company expects to see downward trajectory in attrition rate in coming quarters.

* Driven by robust demand environment and continued market share gains, driven by its Cobalt cloud capabilities and differentiated digital value proposition, the company narrowed its revenue guidance for FY23 to 15.0% to 16.0% in constant currency terms and the operating margin guidance changes for this year at 21% to 22% with anticipated more at the lower end.

* Keeping in view the capital allocation policy, the board has announced buyback of equity shares of Rs 9300 crore of a price not exceeding ?1850/- through open offer. An interim dividend of approx. ?6940 crore i.e. ?16.5 per share. Announcement of buyback will further improve the EPS of the company.

* We continue to remain positive on Infosys, a leader in next-generation digital service and consulting. Though company see some caution due to mortgage issue in financial services, caution in hi-tech and telecom but it continuous to gain market share in cloud and digital business, reduction in employee attrition rate from the past 3 quarters and large deal wins. We maintain our BUY rating on the stock with a target price of ?1800 per share.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at  https://www.rathi.com/LeadGenerate/Static/disclaimer.aspx
SEBI Registration No.: INZ000170832

Above views are of the author and not of the website kindly read disclaimer