• Tuesday, May 28, 2024

Business

Infosys Q4 net soars 30 per cent, revenue up 1.3 per cent

Infosys MD and CEO Salil Parekh

By: Shajil Kumar

INDIAN IT services major Infosys has said its consolidated profit jumped 30 per cent to Rs 79.69 billion (£770 million) in the March 2024 quarter, up from Rs 61.28 bn (£590mn) in the year-ago period.

The consolidated revenue of Infosys during the quarter increased 1.3 per cent to Rs 379.23 bn (£3.65bn) from Rs 374.4 bn (£3.60bn) in the same quarter a year ago.

The Bangalore-headquartered company expects revenue growth of 1-3 per cent in constant currency for FY25 and an operating margin of 20-22 per cent.

Infosys MD and CEO Salil Parekh said there is no change in the discretionary spending on digital transformation work as the company transitioned to FY25.

“Growth guidance for next year is higher than where we finished for this year. The difference is small. As we go into the industries, we see financial services to see a better outlook in the next year compared to the past year,” Parekh said.

“Manufacturing will have slower growth this year. Given the outlook with discretionary spending, digital work remaining the same, more focus on cost efficiency and consolidation, we have created that revenue growth guidance,” he said.

The growth projection is lower compared to the outlook of between 4 per cent and 7 per cent for FY24.

Infosys posted an operating margin of 20.1 per cent during the reported quarter and 20.7 per cent in FY24.

During the fiscal ended March 2024, net profit increased 8.9 per cent to Rs 262.33 bn (£2.52bn) from Rs 240.95 bn (£2.32bn) recorded in FY23.

The annual income from operations increased 4.7 per cent to Rs 1.53 trillion (£14.79bn) in FY24 from Rs 1.46 tn (£14.12bn) a year ago.

Lower headcount

The company’s employee headcount fell 7.5 per cent to 317,240 at the end of FY24 from 343,234 in FY23.

“When we started, we were at 77 per cent utilisation including the trainees. The growth environment was different at that time. Our utilisation has gone up to 82-83 per cent. Our attrition has also come down significantly. That is the reason for net headcount reduction,” Infosys CFO Jayesh Sanghrajka said.

The company registered an attrition of 12.6 per cent.

“Hiring model has changed in last few years. We are now on more agile model of campus hiring. At this point of time we are at 82 per cent utilisation. We still have headroom over that and attrition is very low so we have not decided on campus hiring numbers at this point of time,” Sanghrajka said.

Highest contract value

The total contract value of Infosys’ large deals in FY24 was the highest ever at $17.7bn (£14.22bn), with 52 per cent being net new.

“We delivered the highest-ever large deal value in 2023-2024. This reflects the strong trust clients have in us. Our capabilities in Generative AI continue to expand. We are working on client programmes, leveraging large language models with impact across software engineering, process optimisation, and customer support,” Parekh said.

He said the large deals won during the FY24 will help the company in FY25.

The Infosys board recommended a final dividend of Rs 20 per equity share for FY24 and a special dividend of Rs 8 per equity share.

The board reviewed and approved the capital allocation policy for the next five years from FY25-FY29 after taking into consideration the strategic and operational cash requirements.

German firm acquistion

The company also announced that it will acquire a 100 per cent stake in German firm in-tech in an all cash deal for €450mn (£385.29mn). in-tech develops solutions in e-mobility, connected and autonomous driving, electric vehicles, off-road vehicles and railroad.

The acquisition will bring Infosys, marquee German original equipment manufacturers (OEMs) deep client relationships, and industry expertise with a multidisciplinary team of 2,200 people across locations in Germany, Austria, China, the UK, and nearshore locations in Czech Republic, Romania, Spain, and India.

The acquisition is expected to close in the first half of FY25. (PTI)

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