Infosys Q3 results: Profit rises 13.4% to Rs 6,586 crore; FY23 revenue guidance revised upward

Infosys, India’s second largest software exporter, on Thursday reported a 13.4 per cent year-on-year (YoY) rise in net profit at Rs 6,586 crore for the December quarter compared with Rs 5,809 crore in the same quarter last year. The IT major said its deal wins were strongest in eight quarters, as it revised upward its FY23 revenue guidance to 16-16.5 per cent in constant currency terms (CC). Infosys, however, retained its Ebit margin guidance at 21-22 per cent for the financial year.  

The Salil Parekh-led IT major said its revenue for the third quarter rose 20.2 per cent YoY to Rs 38,318 crore compared with Rs 31,867 crore in the year-ago quarter. Dollar revenue came in at $4,659 million, up 2.3 per cent sequentially.

The IT firm said its CC revenue growth terms stood at 13.7 per cent on a YoY basis. Revenue CC growth stood at 2.4 per cent sequentially. 

Operating profit margin for the quarter came in at 21.5 per cent compared with 23.5 per cent in the year-ago quarter.

Infosys has revised upward its CC revenue guidance to 16 per cent-16.5 per cent from 15 per cent-16 per cent earlier. The company won orders worth $3.3 billion during the quarter — the highest in the last eight quarters. “Year on year growth was in double digits for most business segments and geographical regions in constant currency terms,” Infosys said. Digital comprised 62.9 per cent of overall revenues and grew at 21.7 per cent in constant currency. 

What the management says

Attrition reduced meaningfully during the quarter and is expected to decline further in the near-term, said Nilanjan Roy, Chief Financial Officer, who said operating margins in Q3 remained resilient due to cost optimisation benefits which offset the impact of seasonal weakness in operating parameters.

CEO and MD Parekh said the revenue growth was strong for the quarter, with both digital business and core services growing. “This is a clear reflection of our deep client relevance, industry-leading digital, cloud, and automation capabilities, and the unrelenting dedication of our employees”, Parekh said.

“As reflected in the large deals momentum, we continue to gain market share as a trusted transformation and operational partner for our clients. Our end-to-end capabilities and global scale make us a preferred choice as clients look at consolidating vendors. We remain focused on helping businesses accelerate their digital agenda to uncover new value and growth, as well as improve operational and cost effectiveness”, Parekh added.

Capital allocation

Infosys informed bourses that it started share buyback program through open market route from December 7 and till date, it has bought back 31.3 million shares worth Rs 4,790 crore or 51.5 per cent of total authorisation of Rs 9,300 crore at an average price of approximately Rs 1,531 per share (compared to maximum Buyback Price of Rs 1,850 per share).