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Infosys Quarterly Result Q3 FY22 Results

21 April 2022

India’s second largest IT company Infosys posted its earnings report for the third quarter of FY22. 

The company saw net profit increase 11.8% to Rs 5,809 crore in Q3 FY 22 from Rs 5,197 crore in the same quarter of the previous year. Infosys’ revenue jumped 22.9% to Rs 31,867 crore from Rs 25,927 crore in Q3 FY21. 

Driven by overall growth across all major verticals and the latest partnership with German auto giant Daimler (parent company of Mercedes Benz), and mainly led by the large deals worth $2.53 billion that Infosys secured in the quarter, the company’s sequential growth was intact. 

Financial Performance

Infosys reported a 7.2% QoQ jump in its consolidated net profit to Rs 5,809 crore in Q3 FY22 from Rs 5,421 crore in the previous quarter. The company also reported a 7.7% QoQ increase in its revenue from operations to Rs 31,867 crore from Rs 29,602 crore. 

Markedly, Infosys reported a 42.1% increase in its revenue from the digital business segment. However, Infosys’ performance in Q3 FY22 was marred by a dip in its operating margin to 23.5% from 25.4%. Supply chain challenges and rising costs continued to chip away at the margins.

The IT giant’s attrition rate increased to 25.5% from 20.1% in the previous quarter while the same was reported at 11% in the year ago period. To combat the same, the company said that it will recruit 55,000 people with its global graduate hiring program.

Hits

  • Revenue up by 20.9% YoY to Rs 31,867 crore, QoQ revenue up by 7.7%.
  • Operating profit up by 13.6% YoY to Rs 7,484 crore from Rs 6,589 crore.
  • New deals worth $2.53 billion signed in the September-December 2021 quarter.
  • Revenue from digital business up by 41.2% YoY.
  • India business grew the fastest by 38.4% YoY.
  • 111 new clients added in the quarter under review.
  • Earnings per share (EPS) increased to Rs 13.86 from Rs 12.25 in the year ago period.

Misses

  • Revenue from core business up by a mere 0.5%.
  • Operating margin down to 23.5% from 25.4% in Q3 FY21.
  • Other income declined by 18.3% YoY to Rs 459 crore from Rs 562 crore.

Segment-wise revenue

  • Financial services: Revenue up 15% YoY to Rs 10,023 crore
  • Retail: Revenue up 19.4% YoY to Rs 4,612 crore
  • Communication: Revenue up 21.7% YoY to Rs 3,979 crore
  • Energy, Utilities, Resources and Services: Revenue up 13.2% YoY to Rs 3,740 crore
  • Manufacturing: Revenue up 46.4% YoY to Rs 3,598 crore
  • Hi-Tech: Revenue up 18.6% YoY to Rs 2,567 crore
  • Life Sciences: 28.3% YoY to Rs 2,383 crore
  • Others: Revenue up 33.9% YoY to Rs 965 crore

What the Management says

Infosys CEO and MD Salil Parekh said, that the sustained strategic focus on areas of relevance for our clients in digital and cloud, continued re-skilling of employees have helped in the continued strong performance of the company. He said “This is reflected in an upgrade in our revenue guidance to 19.5%-20.0% for FY22. We expect the healthy technology spend to continue with large enterprises progressing on their digital transformations.”

Other things to know about Infosys

  • U.B. Pravin Rao retired from the position of CEO and Whole-Time Director on December 12, 2021 with Salil Parekh taking over as the CEO and MD of Infosys.
  • Infosys Ltd’s subsidiary Infosys Consulting Pte Ltd acquired Malaysia’s Global Enterprise Ltd for Rs 33 crore to consolidate the company’s presence in Malaysia.
  • Some of the deals Infosys closed during the quarter include Australian Open , Belgium-based Proximus, Financial Times, and MSG Entertainment.
  • Infosys has the second highest market capitalization among IT companies in India with a P/E ratio of 40.19 which is slightly lower than the industry average of 41.9 while its P/B ratio is 10.13 against the industry average of 10.08. The company’s dividend yield is higher than the sector dividend yield at 1.47%.

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