Infosys reported a consolidated profit of Rs. 5,421 crores for the quarter that ended in September. Daimler deal, broad growth across all verticals and deeper penetration of digitalisation were a few factors that aided an increase of 11.9% year-on-year (y-o-y). This is a 4.4% increase in comparison to Rs.5,195 crores achieved for the June quarter.

Infosys’ revenue from its IT business grew 20% from Rs.24,570 crores to Rs 29,602 crores surpassing the market expectations. Infosys has also revised its revenue guidance for FY22 to 16.5-17.5% but has managed to retain margin guidance at 22-24%.

Attrition that is a pain-point for all IT companies this season zoomed past 20% for Infosys from 13.9% reported in the previous quarter.

Infosys closed in the green at Rs 1708.75- up by 1.42% ahead of its quarterly results on 13 October 2021. An interim dividend of Rs.15 per share has been announced for FY22.

Infosys Q2 Key Hits

  • Infosys registered at 42.2% YoY constant currency digital services revenue this quarter.
  • The company signed on deals worth $2.15 bn
  • The company has added 227 new clients for FY22.
  • Its revenue grew 20.7 % YoY from Rs. 24,570 crores to Rs 29,602 crores and 4.4% QoQ Rs. 24,570 to Rs. 27,896.
  • The company posted a ~12% YoY profit of Rs. 5421 and a 4.4% profit growth when compared to last quarter.
  • Infosys share prices have clocked a 23.71% return in the current FY22 and have gained  7% since July. The stock has risen 1.5% at Rs.1708.75 on the BSE 
  • The IT giant has announced to hire 45,000 college graduates this fiscal year compared to 35,000 last year. 
  • An interim dividend of Rs.15 per share has been announced for FY22.
  • 100% variable pay along with special incentives announced for employees.
  • Infosys in lieu of COVID–19 has announced Hybrid work model, with over 86% of its employees in India having received at least one vaccine dose.

Infosys Q2 misses

  • Revenue by client geography for India fell nearly 0.6% from 3.0 for YoY.
  • Attrition levels zoomed past 20% from 12.8% YoY and 13.9% QoQ.
  • Revenue by major business segments remained flat. 
  • Operating margin fell from 25.4% to 23.6% YoY

Management Report

Sahil Parekh, CEO and MD of Infosys has attributed robust growth and strong performance largely to the strengthening of digitisation across the globe. In lieu of strong market opportunities that are rapidly accelerating digital journeys, Parekh commented how the likes of cloud play, Infosys Cobalt ™ has uniquely positioned them to serve a gigantic market and emerge as the largest digital transformation partner

COO, Pravin Rao has announced that Infosys would be harnessing the potential of Indian college graduates to its fullest, hiring around 45,000 new employees. He also highlighted the largest ever deal crack of $3.15 billion. 

What’s in for investors

Infosys’s struggle with the government website on Income Tax filing is a piece of news to look out for, while the company says that they are on track to fully rectify the errors and seamless tax filing already underway. If the portal fails gain, trouble could be brewing for the IT giant in terms of goodwill and of course the peers.