The second largest software services company reported 11.8 per cent year-on-year growth in its consolidated net profit for the quarter ended September to Rs. 5,421 crore on Wednesday. Infosys reported 20.5 per cent year-on-year growth in consolidated revenue to Rs. 29,602 crore.
The numbers outperformed Street expectations which estimated the company to report 7.5-9.5 per cent profit growth and 18.5-20 per cent revenue growth on a year-on-year basis respectively.
On a sequential basis net profit grew by 4.3 percent compared to Rs. 5,195 crore in Q1 and revenue grew by 6.1 percent compared to Rs. 27,896 crore in Q1. On a year-on-year constant currency basis revenue improved by 19.4 percent and 6.3 percent sequentially.
“Our stellar performance and robust growth outlook continue to demonstrate our strategic focus and the strength of our digital offerings. As we witness a strong market opportunity with global enterprises rapidly accelerating their digital journeys, our sustained investments in expanding capabilities, including the differentiated cloud play, Infosys Cobalt, has uniquely positioned us to continue serving our clients effectively, gain market share and emerge as the preferred cloud and digital transformation partner in the market,” said Salil Parekh, CEO and managing director. Infosys.
Last week, India’s largest IT service provider Tata Consultancy Services disappointed analysts after its Q2 consolidated net profit grew 29 percent to Rs. 9,624 crore and revenue grew 16.8 percent on a year on year basis to Rs. 46,867 crore during the quarter due to softness in the European business.
Infosys reported that growth was broad-based across geographies and segments with the largest geography, North America growing at 23.1 per cent and the largest segment, Financial Services growing at 20.5 per cent, YoY in constant currency. Large deal momentum continued with TCV of $2.15 billion in Q2 down from $2.6 billion in Q1. Operating margin for the quarter was 23.6 per cent.
Digital revenues stood at 56.1 per cent of total revenues, reporting year on year constant currency growth of 42.4 per cent.
“Our operating margins for Q2 were resilient; the impact of enhanced employee value proposition initiatives was offset by strong operating parameters, cost optimization and operating leverage. We will continue to invest in our employees to remain a preferred employer-of-choice and seamlessly fulfill client demand”, said Nilanjan Roy, chief financial officer, Infosys.
Infosys informed that it has completed the open market share buyback on September 8 at an average price of about Rs. 1,649 per share (compared to maximum Buyback Price of Rs. 1,750 per share). Consequently, the share capital of the company has reduced by 1.31 per cent. With this, the company stated that it has returned ~82 per cent of the free cash flow for FY20 and FY21 through dividends and buyback.
