Infosys March 2023 Quarter Results By Emkay Global Financial Services
Infosys March 2023 Quarter Results – Disappointing quarter; guides 4-7% growth in FY24
Actual vs. expectations
Operating performance misses expectations
Likely stock reaction
Negative
Key positives: LTM attrition moderated by 340bps QoQ; steady deal intake
Result Summary
· Infosys reported revenues of USD4.55bn, down 2.3%/+6.4% QoQ/YoY (CC -3.2%/+8.8% QoQ/YoY), below our expectations of USD4.71bn. (TCS Q4FY23 revenues was USD7.19bn, 0.6% CC QoQ).
· EBITM declined ~50bps QoQ to 21.0%, 70 bps below our expectations. (TCS IT services EBITM was flat QoQ at 24.5%).
· Adj. Profits at Rs61.3bn (-7.0% QoQ, +7.8% YoY), below our expectations of Rs65.3bn due to operating performance miss.
· FY24 outlook: Infosys has guided for 4-7% YoY CC revenue growth in FY24, implying a 1.7-2.9% CQGR in next 4 quarters. It has guided for 20-22% EBITM for FY24 (vs. 21.1% in FY23).
· TCV of deal intake stood at USD2.1bn vs USD3.3bn in Q3FY23.
· Company declares final dividend of Rs17.5/share.
Growth by Verticals (all in CC terms)
· Financial Services: 0.4%YoY ( V/s 5.5% YoY in Dec’22 quarter)
· Manufacturing: 26.5%YoY ( V/s 36.8% YoY in Dec’22 quarter)
· Retail: 12.6%YoY ( V/s 12.7% YoY in Dec’22 quarter)
· ECS: 17.1% YoY( V/s 25.9% YoY in Dec’22 quarter)
· Communication: 0.3% YoY( V/s 12.7% YoY in Dec’22 quarter)
· Hi Tech: 3.7% YoY( V/s 10.4% YoY in Dec’22 quarter)
· Life sciences: 15.7% YoY( V/s 5% YoY in Dec’22 quarter)
Growth by Geographies (all in CC terms)
· US: 6.0%YoY ( V/s 10.5% YoY in Dec’22 quarter)
· Europe: 20.3%YoY ( V/s 25.3% YoY in Dec’22 quarter)
· ROW: 3.4% YoY( V/s 11.9% YoY in Dec’22 quarter)
· India: -7.1% YoY( V/s -5.4% YoY in Dec’22 quarter)
Manpower details
Total Headcount: 343,234, down 3,611 QoQ
LTM Attrition: 20.9%, V/s 24.3% in Dec’22 quarter and 27.1% in Sep’22 quarter.
Above views are of the author and not of the website kindly read disclaimer
