India’s second largest IT company reported a consolidated revenue of Rs 34,470 crore in Q1, which was higher than the analyst estimate of Rs 34,150 crore. On a YoY basis, the revenue jumped 23.6 per cent.
In constant currency terms, its revenue grew by by 21.4 per cent YoY and 5.5 per cent QoQ. Operating margin at 20.1 per cent, declined 3.6 per cent YoY and 1.4 per cent QoQ.
Infosys managed to beat Street estimates on the revenue front but disappointed on both PAT and margins.
While increasing FY23 revenue guidance to 14-16 per cent, the Bengaluru-based software exporter has retained margin guidance at 21-23 per cent.
“Our strong overall performance in Q1 amidst an uncertain economic environment is a testament to our innate resilience as an organization, our industry-leading digital capabilities and continued client relevance. We continue to gain market share and see a significant pipeline driven by our Cobalt cloud capabilities and differentiated digital value proposition,” said Infosys CEO and MD Salil Parekh.
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Like its peers in the industry, attrition remains a headache for Infosys as the attrition rate jumped to 28.4 per cent in the June quarter from 27.7 per cent in the preceding March quarter.
“We are fueling the strong growth momentum with strategic investments in talent through hiring and competitive compensation revisions. While this will impact margins in the immediate term, it is expected to reduce attrition levels and position us well for future growth. We continue to optimize various cost levers to drive efficiency in operations,” said Infosys CFO Nilanjan Roy.
The Bengaluru-based IT major said YoY growth was in double digits across all business segments in constant currency terms. Digital accounted for 61.0 per cent of overall revenues, growing at 37.5 per cent in constant currency. Q1 deal wins stood at $1.7 billion vs $2.3 billion QoQ.
Roy said the company’s continued high focus on cash led to strong free cash flow generation to net profit conversion at 95.2 per cent and improvement in ROE to 31 per cent. The total free cash flow during the June quarter stood at Rs 5,106 crore.
