Infosys Q1 Result: Revenue guidance trimmed, headcount falls QoQ; six key points from the IT major’s Q1FY24 earnings

Infosys Q1 Result: Infosys' Q1FY24 net profit rose 11 per cent YoY to 5,945 crore, while revenue increased 10 per cent YoY to 37,933 crore. The company revised its revenue guidance for FY24 to 1-3.5 per cent but retained its operating margin guidance.

Nishant Kumar
Updated20 Jul 2023, 05:30 PM IST
Infosys retained its operating margin guidance but revised its revenue guidance downward for FY24.
Infosys retained its operating margin guidance but revised its revenue guidance downward for FY24. (PTI)

The June quarter numbers of Infosys came mixed. As per experts, the IT major's revenue was broadly in line but profit and operating margin figures were below expectations.

The company retained its operating margin guidance but revised its revenue guidance downward for FY24. Yet it claimed in its exchange filing that strong large deal closures and robust deal pipeline position it well for future growth.

“We had a solid Q1 with a growth of 4.2 per cent and large deals of $2.3 billion which helps us to set a strong foundation for future growth," said Salil Parekh, CEO and MD.

"Our generative AI capabilities are expanding well, with 80 active client projects. Topaz, our comprehensive AI offering, is resonating well with clients. We see this being transformative for clients and enhancing our overall service portfolio” said Parekh.

Nilanjan Roy, CFO of the company said: “Q1 operating margins were resilient in an uncertain macro environment on the back of our continued focus on cost optimization. Company’s rigorous operational discipline including improved productivity measures and higher utilization helped margins for the quarter.”

“Free cash conversion was robust at 96.6 per cent of net profits. Execution of strong capital allocation policy resulted in higher payouts to investors and improved ROE (return on equity) to 32.8 per cent” Roy added.

Here are six key highlights of Infosys' Q1FY24 scorecard:

The key numbers

The IT heavyweight reported an 11 per cent year-on-year (YoY) rise in Q1FY24 net profit to the tune of 5,945 crore, compared to 5,360 crore in the corresponding period last year. Revenue rose 10 per cent YoY to 37,933 crore. The company registered an operating profit of 7,891 crore which was 14.1 per cent YoY while the operating margin came at 20.8 per cent up 70 bps against 20.1 per cent YoY.

In constant currency terms, Infosys' Q1FY23 revenue grew 4.2 per cent YoY and one per cent QoQ.

Read more: Infosys Q1 Results: Net profit rises 11% on year to 5,945 crore

Performance of business segments

Reveue of financial services and communication segments declined on a yearly basis. Rest all grew during the quarter under review.

Financial services revenue declined 4.7 per cent YoY while revenue of the communication segment declined 6.1 per cent YoY.

Revenue of the manufacturing segment saw a healthy growth of 21.3 per cent YoY while the life sciences segment also rose significantly by 14.9 per cent YoY. The 'others' segment revenue rose 28 per cent YoY. Retail (up 4 per cent YoY) and Hi-tech (up 2.5 per cent YoY) saw tepid growth in Q1FY24.

Client data

The company added 99 clients during Q1FY24 whereas in the same quarter last year, it added 106 clients and in the last quarter (Q4FY23) it added 115 clients. Overall, it had 1,883 active clients as on June 30, 2023, up from 1,778 clients it had as on June 30, 2022, and 1,872 clients as on March 31, 2023.

Client geography

The company's revenue from Europe rose by 10.9 per cent YoY, followed by India (up 9.3 per cent). Revenue from North America saw a mild growth of 2.3 per cent YoY while revenue from the 'rest of the world' declined by 4.5 per cent YoY.

Guidance for FY24

Infosys revised revenue guidance for FY24 to 1-3.5 per cent but retained its operating margin guidance for the year. It expects an operating margin of 20-22 per cent for FY24.

Read more: FY24 revenue guidance sharply trimmed to 1-3.5% From 4-7%; check details

Headcount and attrition

The company said attrition declined to 17.3 per cent during Q1FY24 from 28.4 per cent in the same quarter last year and 20.9 per cent in Q4FY23. However, the total number of employees declined on a quarter-on-quarter basis.

As per the regulatory filing, the total number of employees was 3,36,294 as on June 30, 2023, against 3,35,186 employees as on June 30, 2022, and 3,43,234 employees as on March 31, 2023.

Read more: Infosys attrition rate drops in Q1, employee headcount falls marginally

Disclaimer: The views and recommendations above are those of individual analysts and broking companies, not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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First Published:20 Jul 2023, 05:30 PM IST
HomeCompaniesCompany ResultsInfosys Q1 Result: Revenue guidance trimmed, headcount falls QoQ; six key points from the IT major’s Q1FY24 earnings

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