Infosys posts 11.4% YoY rise in Q1 net at Rs 4,233 crore; beats estimates

Information technology (IT) major, Infosys, on Wednesday reported an 11.4 per cent year-on-year (YoY) rise in its consolidated net profit at Rs 4,233 crore for the April-June quarter of the financial year 2020-21 (Q1FY21). In the year-ago period, the company had logged a profit of Rs 3,798 crore.

Sequentially, the numbers fell 1.45 per cent.

Infosys' revenue for the quarter under review stood at Rs 23,665 crore, up 8.5 per cent YoY. In constant currency (CC) terms, revenue grew 1.5 per cent YoY.

The company signed deals worth $1.74 billion during the quarter.

“Our Q1 results, especially growth, are a clear testimony to the relevance of our service offerings and deep understanding of clients’ business priorities which is resonating with them in these times. It also demonstrates the remarkable dedication of our employees and leadership during this period”, said Salil Parekh, CEO and MD. "Our confidence and visibility for the rest of the year is improving driven by our Q1 performance and large deal wins," Parekh added. 

The company also gave FY21 revenue growth guidance in the range of 0 per cent-2 per cent in constant currency while operating margin for FY21 will be in the range of 21 per cent -23 per cent, the company said in its press release. 

The company's digital revenues stood at $1,389 million (44.5 per cent of total revenues), YoY growth of 25.5 per cent in constant currency. Operating profit stood at Rs 5,365 crore, up 20 per cent YoY and 8.9 per cent QoQ. Operating margin came in at 22.7 per cent, an increase of 220 basis points (bps) YoY while basic earnings per share (EPS) was Rs 9.98, growth of 13.1 per cent YoY and decline of 2 per cent QoQ.

Free cash flow for the quarter under review came in at Rs 5,524 crore, an increase of 63.5 per cent YoY while voluntary attrition for IT services declined to 11.7 per cent from 20.2 per cent in Q120, the company informed.  

The numbers were better than what analysts had expected. Most analysts had estimated Infosys to report subdued numbers for the period due to disruptions caused by the Covid-19 pandemic. 

Emkay Global, for instance, had built-in a 4.2 per cent quarter-on-quarter (QoQ) fall in the US dollar revenues. Net sales in rupee terms were estimated to come in at Rs 23,251.1 crore, up 6.6 per cent YoY, and down 0.1 per cent QoQ. EBITDA was projected to fall 9.6 per cent YoY and 0.6 per cent QoQ to Rs 5,645.1 crore. EBITDA margin was expected to rise 65 bps YoY and fall 13 bps QoQ to 24.3 per cent. Net profit was pegged at Rs 4,006.6 crore, up 5.5 per cent YoY and down 7.3 per cent QoQ. CLICK TO READ ANALYSTS' EXPECTATIONS.  

Geography-wise revenues

 

“During the last few months, we took multiple steps aimed at employee safety and well-being while providing seamless services to our clients. Clients have recognised us for the speed, security and effectiveness of our remote enablement efforts. The strength and diversity of our portfolio was evident in good revenue performance, sizeable large deal wins, high focus on operating metrics and significant decline in attrition," said Pravin Rao, COO. 
 

Meanwhile, the company also announced the appointment of Bobby Parikh as an Independent Director of the company, effective July 15, 2020.