Infosys Q3 results update
Last updated: 14 Jan, 2021 | 09:37 am
- Profit beats estimates: Infosys, India's second-largest software services exporters, has reported a 7.3% on-quarter rise in consolidated net profit to ₹5,197 crore in Q3FY21, beating analyst estimates. Analysts had earlier estimated a profit of about ₹5,050 crore.
- Revenue growth: Infosys revenues grew 5.52% QoQ to ₹25,927 crore, backed by its highest-ever deal wins. Large deal total contract value (TCV) was at an all time high of $7.13 billion. In fact, the company has seen its revenue grow across all verticals except Hi-Tech. The table below shows Infosys revenue growth across various verticals.
- Operational margins improve:EBIT margin remained steady at 25.4% against 25.3% despite wage hikes and currency headwinds. Cost avoidance measures and large deal wins aided the margins of Infosys in Q3FY21.
- Revenue guidance: Infosys now expects revenue to grow 4.5-5% in the current financial year. This is higher than the 0-2% growth it had guided for earlier in the year. It has also raised operating margin guidance to 24-24.5%, better than analyst estimates of 23-24 percent.
- New Deal: Infosys board has approved a definitive agreement to purchase assets and employees of Carter Digital, an Australian design agency. It did not disclose the cost of the transaction.
Infosys has reported Q3FY21 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 $7.13 billion, out of which 73% was new deals.
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 Q3FY21 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.