Infosys Q1 FY24: Revenues Rise By 4.2%, Net Profit Grows 1%

Infosys on Thursday revealed that its revenues in constant currency (CC) terms witnessed a growth of 4.2 per cent year-on-year (YoY) and a 1 per cent quarter-on-quarter (QoQ) increase in Q1 FY24.

The company’s revenues stood at Rs 37,933 crore, reflecting a 10 per cent YoY growth. The consolidated net profit for the Q1 FY24 was Rs 5,945 crore, a growth of 1 per cent YoY.

Despite the positive growth in revenues, the company faced a slight decline in operating margin. The operating margin for Q1 FY24 settled at 20.8 per cent, indicating a 0.7 per cent YoY growth, but experienced a marginal 0.2 per cent QoQ decline.

Consolidated sales saw a slight 1.3 per cent sequential growth, while the net profit declined by around 3 per cent. The revenue, in constant currency terms, showed only a marginal 1 per cent increase quarter-on-quarter (QoQ). The consolidated operating margin stood at 20.8 per cent, reflecting a 20 basis points sequential decrease.

Infosys has provided its guidance for the fiscal year 2023-24. The company aims to achieve a revenue growth of 1.0 per cent to 3.5 per cent in constant currency terms for the entire fiscal year. Alongside, the company aims to maintain its operating margin within the range of 20 per cent to 22 per cent.

“Q1 operating margins were resilient in an uncertain macro environment on the back of our continued focus on cost optimization. Company’s rigorous operational discipline including improved productivity measures and higher utilization helped margins for the quarter,” said Nilanjan Roy, CFO.

“Free Cash conversion was robust at 96.6 per cent of net profits. Execution of strong capital allocation policy resulted in higher payouts to investors and improved ROE to 32.8 per cent,” he added.

During the June quarter, Infosys secured significant contracts amounting to USD 2.3 billion, slightly surpassing the USD 2.1 billion worth of deals won in the preceding March quarter.

In line with its industry counterparts, Infosys experienced a continued reduction in attrition levels during the quarter. The 12-month trailing attrition rate declined to 17.3 per cent in the first quarter, down from 20.9 per cent in the previous quarter.

Comparatively, the attrition rate was notably higher at 28.4 per cent during the same period in the previous year.

Infosys saw varying results across its verticals in Q1 FY24. While the financial services segment, its largest vertical, witnessed a 4.7 per cent YoY decline in revenue, the communication vertical reported a 6.1 per cent drop in sales. On the other hand, the manufacturing and lifesciences sectors reported impressive double-digit YoY growth.

In terms of geographical performance, North America saw a modest 2.3 per cent YoY growth during the quarter, whereas Europe reported a substantial 11 per cent growth.

Infosys' shares closed lower at Rs 1,449.50 on the NSE, down 1.7 per cent during Thursday's trading.