Infosys Q4 results: Revenue meets estimates; announces dividend of of Rs 16 per share

Infosys Q4

Profit misses estimates: Infosys, India's second-largest IT firm reported a 12% on-year rise in consolidated profit to Rs 5,686 crore below street estimates. Analysts had an estimated profit of Rs 5,950 crore. In the same period last year, the company reported a net profit of Rs 5,097 crore. On a sequential basis, the profit declined by 2.1% from Rs 5,809. 

Infosys results: Summary in brief

Infosys earnings: Revenue growth- The consolidated revenue from the operations jumped to Rs 32,276 crore, up nearly 23% on-year and 1.2% from the previous quarter. Analysts had estimated revenue of Rs 32,700. Infosys’ digital revenue was 59.2% of total revenues. Among verticals, manufacturing, life science, communication, and financial services posted robust YoY growth in sales. Geographically, North America reported 18.2% on-year growth and India saw 25.9% growth from the year-ago quarter.

Guidance FY23: The company has given strong revenue guidance for FY23 of 13%-15% in constant currency and operating margin guidance of 21%-23%. Infosys delivered strong financial performance – EPS growth of 15.2%, Free Cash Flows surpassing $3 billion, and Return on Equity of 29.1%

New Deal: The company added 110 new clients in the Q4FY22. The company’s large deal flows remained strong with TCV of $2.3 billion in Jan-Mar 2022 quarter as compared to $2.53 billion in the previous quarter. 

Infosys Q4 results: Highlights

Attrition rate: During Jan-Mar 2022, Infosys saw a rise in attrition at the company. The voluntary attrition rate increased to 27.7% from 25.5% in the previous quarter. Infosys has hired 85,000 freshers in the financial year gone by and is looking to hire upwards of 50,000 in the current fiscal.

Dividend: The company has recommended a final dividend of Rs 16/- per equity share for the financial year ended March 31, 2022

Infosys Q4 results: Management Commentary- “Infosys delivered highest annual growth in a decade with broad-based performance driven by deeply differentiated digital and Infosys Cobalt led cloud capabilities, powered by ‘One Infosys’ approach. We continue to gain market share as a result of sustained clients’ confidence in our ability to successfully navigate their digital journeys”, said Salil Parekh, CEO, and MD at Infosys.

Infosys results: Review

Infosys has reported a stable set of numbers in Q4. While the company’s bottomline missed estimates, it was able to meet estimates on revenue.   Infosys outlined that its growth remained broad-based and deal momentum robust, with digital transformation rapidly scaling across verticals and regions. However, the margins came under pressure and dropped to 21.5% from 23.5%. The firm has also seen a high attrition at 27.7% from 25.5% in the previous quarter.  

With a robust demand environment ahead, the company has guided for making appropriate long-term investments in capability building across sales, delivery and innovation. It has also said that it will undertake aggressive cost optimization programs and value led pricing driven by service and brand differentiation. The company has given a robust revenue and margin guidance for Apr-Mar 22 period.