Infosys Q2 results beat estimates

Last updated: 14 Oct, 2020 | 02:48 pm

Infosys Q2 results beat estimates
  • Profit beats estimates: Infosys, India's second-largest software services exporters, has reported a 13.7% on-quarter rise in consolidated net profit to ₹4,858 crore in Q2FY21, beating analyst estimates. Analysts had earlier estimated a profit of about ₹4,450 crore.
  • Revenue growth across verticals: Infosys revenues grew 3.8% QoQ to ₹24,570 crore, backed by its highest-ever deal wins. In fact, the company has seen its revenue grow across all verticals except Manufacturing and Communications. The table below shows Infosys revenue growth across various verticals.
  • Operational margins improve: The EBIT margin improved during the quarter from 22.7% to 25.30%. Cost avoidance measures, favourable currency movements, and large deal wins aided the margins of Infosys in Q2FY21. “Free Cash Flows grew significantly in H1 driven by focus on liquidity and cash management.
  • Revenue guidance: Infosys now expects revenue to grow 2-3% in the current financial year. This is higher than the 0-2% growth it had guided for earlier. It has also raised operating margin guidance to 23-24% from 21-23%. 
  • Interim dividend: Infosys has declared an interim dividend of ₹12 per equity share and fixed October 26, 2020, as the record date for interim dividend and November 11, 2020, as payment date.
  • Salary hikes: The company has announced that it will roll out salary increases and promotions across all levels effective 1st January. Infosys also said it is giving 100% variable pay along with a special incentive for Q2. 

Infosys has reported Q2FY21 results better than street estimates. Infosys was able to beat expectations due to its record high deal wins, and implementing cost cuts to maintain its revenue and operational profitability. Large deal wins during the quarter stood at $3.15 billion—higher than the $1.74 billion worth of deals it won in the previous three months. 

The Covid-19 pandemic has forced a tectonic shift in businesses processes to move towards greater digitization. This has helped the IT sector to bounce back faster than other industries. Infosys said that the relevance of its is resonating with its clients in these times. The growth in Q2FY21 has improved visibility for the rest of the year for Infosys. The company is also confident of further expanding its revenues and margins going forward.

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