Infosys Q4 Results: March Quarter Profit Falls 7%, Guides For Revenue Growth Of 4-7% For FY24

The country's second largest information technology services company - Infosys - on Thursday reported net profit of Rs 6,128 crore for quarter ended March 2023, marking a sequential decline of 7 per cent from Rs 6,586 crore during the previous quarter. On an annual basis, however, Infosys' profit rose 8 per cent from Rs 5,686 crore during the same period last year.

Its revenue from operations fell 2.28 per cent to Rs 37,441 crore versus Rs 38,318 crore in the previous quarter. In constant currency terms, Infosys' revenue declined 3.2 per cent.

The company has guided for revenue growth in range of 4-7 per cent for financial year 2023-24 and operating margin in range of 20-22 per cent.

Infosys' latest report card was a disappointment on several fronts - the company missed revenue guidance for FY23 hit by "unplanned project ramp downs and decision-making delays by some clients". With global macroeconomic uncertainties looming, it has given a subdued 4-7 per cent revenue growth forecast for FY24, with top management cautioning that "the environment remains uncertain". 

Infosys had last given single-digit revenue guidance in FY2019.

The Bengaluru-based company won large deals worth $2.1 billion in March quarter and total large deal wins for financial year 2022-23 came in at $9.8 billion.

“Our strong performance in FY23 is a testimony to the continued focus on digital, cloud and automation capabilities which resonated with our clients. We have launched exciting programs with our clients leveraging generative AI platforms” said Salil Parekh, CEO and MD. 

“As the environment has changed, we see strong interest from our clients for efficiency, cost and consolidation opportunities, resulting in a strong large deal pipeline. We have expanded our internal program on efficiency and cost to build a path to higher margins in the medium term. We continue to invest in our people and in supporting our clients”, he added.

For financial year 2022-23, revenue in constant currency terms grew 15 per cent and revenue from digital services came in at 62.2 per cent of total revenues.

“Our continued focus on cost optimization and operational efficiencies have helped in achieving operating margins of 21.0 per cent in FY23, said Nilanjan Roy, Chief Financial Officer. 

“Free cash generation in Q4, led by robust collections, was strong. Executing on our capital allocation policy, we successfully completed the share buyback and have proposed a final dividend of `17.50 for FY23”, he added.

“Growth was broad-based across industry verticals and geographical regions. Digital comprised 62.2 per cent of overall revenues and grew at 25.6 per cent in constant currency. Q4 year on year growth was 8.8 per cent and sequential decline was 3.2 per cent in constant currency terms. Operating margin for the quarter was 21.0 per cent. Free cash flow conversion was 95.3 per cent for Q4. Continuing the recent trend, attrition declined further in Q4,” Infosys said in an earnings release.

Attrition rate continued its downward journey and moderated to 20.9 per cent at the end of March quarter compared with 24.3 per cent at the end of December quarter and 27.27 per cent during the same quarter last year.

Out of total employees 39.4 per cent workforce at Infosys was comprised of women employees.

For FY23, the Board has recommended a final dividend of Rs 17.50 per share. Together with the interim dividend of Rs 16.50 per share already paid, the total dividend per share for FY23 will amount to Rs 34.00 which is 9.7 per cent higher over FY22. With this, the company has announced total dividend of approximately Rs 14,200 crore for FY23.

Infosys shares ended 2.79 per cent lower at Rs 1,388.60 ahead of its earnings announcement.