Infosys spurts after good Q1 results

Infosys jumped 10% to Rs 914.55 after net profit rose 11.45% to Rs 4,233 crore on 8.54% increase in net sales to Rs 23,665 crore in Q1 June 2020 over Q1 June 2019.

On a quarter-on-quarter basis, the consolidated net profit fell 2% while revenues increased 1.7% in Q1 June 2020 (Q1FY21) over Q4 March 2020 (Q4FY20).

Profit before tax (PBT) rose 5.4% to Rs 5792 crore in Q1FY21 over Q4FY20. Tax expense jumped 30.9% to Rs 1520 crore in Q1FY21 over Q4FY20.

Operating profit jumped 8.9% to 5,365 crore in Q1FY21 over Q4FY20. Operating margin stood at 22.7% in Q1FY21, higher than 21.2% in Q4FY20.

Infosys forecast FY21 revenue growth in the range of 0%-2% in constant currency terms. Operating margin for FY21 is expected to be in the range of 21%-23%.

The company announced large deal wins worth $1.74 billion during the quarter. In the US dollar terms, revenue of the company declined year-on-year by 0.3% but grew by 1.5% in constant currency.

Digital revenues were at $1,389 million (44.5% of total revenues), year-on-year growth of 25.5% in constant currency. Free cash flow stood at Rs 5,524 crore with a year-on-year growth of 63.5%.

Commenting on company's performance, Salil Parekh, CEO and MD said, "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.

"Operating margin expanded to 22.7% driven by preemptive deployment of our strategic cost levers along with tactical opportunities triggered by the COVID situation," said Nilanjan Roy, CFO. "Collections were robust and capex was focused, which led to 50% year on year increase in free cash flows. Our liquid and debt free balance sheet is a huge source of strength in these times."

Consolidated cash and cash equivalents stood at Rs 28,674 crore as on 30 June 2020 compared with Rs 27,276 crore as on 31 March 2020 and Rs 24,639 crore as on 30 June 2019.

Attrition rate for Q1 June 2020 declined to 11.7% against 20.2% last fiscal. Infosys had 2,39,233 employees as of 30 June 2020, against 2,29,029 in the same period last year.

Infosys is a global leader in next-generation digital services and consulting

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