Infosys Reports Modest Q4 FY24: Sees Flat Revenue Growth, Lowers Guidance To 1-3% For FY25
In terms of revenue growth, Infosys experienced stagnation, with flat year-over-year (YoY) constant currency (CC) growth in Q4
Infosys on Thursday unveiled its financial results for the fourth quarter of the fiscal year 2023-24. The report reflected a mixed performance, with certain metrics showing growth while others indicate challenges ahead.
In terms of revenue growth, Infosys experienced stagnation, with flat year-over-year (YoY) constant currency (CC) growth in Q4, which was largely in line with analyst expectations. Despite efforts to drive business forward, the company’s revenues remained largely unchanged compared to the same period last year at Rs 37,923 crore. Additionally, there was a 2.2 per cent decline in revenues quarter-over-quarter (QoQ), reflecting a challenging operating environment.
Infosys reported an operating margin of 20.1 per cent in Q4 FY24. The company saw a substantial 30.2 per cent YoY increase in earnings per share (EPS) in rupee terms, indicating better profitability.
The company announced a net profit of Rs 7,969 crore for the fiscal fourth quarter, which came in higher than anticipated by analysts.
On the cash flow front, Infosys generated USD 848 million in free cash flow during the fourth quarter, supporting its financial position and liquidity.
“Free cash flow of USD 848 million in Q4 was highest in the last 11 quarters driven by our relentless focus to improve working capital cycle. Consistent with the objective of giving high and predictable returns to shareholders, the Board has approved the capital allocation policy under which the company expects to return 85 per cent over the next 5 years and progressively increase annual Dividend Per Share,” said Jayesh Sanghrajka, CFO.
“Operating margin expansion in the medium-term and improving cash generation continue to remain our priorities underpinned by early success in Project Maximus”, he added.
Lower Guidance For FY25
In terms of guidance, Infosys revised its revenue growth forecast for the upcoming period to be in the range of 1 per cent to 3 per cent for FY25. This adjustment is lower than analysts’ expectations, which had anticipated a more robust growth trajectory ranging from 1 per cent to 6 per cent. The revised guidance reflects the company’s cautious outlook amidst uncertain market conditions.
The company also reported the large deal TCV for the quarter at USD 4.5 billion, with 44 per cent being net new.
“We delivered the highest ever large deal value in the financial year 2024. This reflects the strong trust clients have in us. Our capabilities in Generative AI continue to expand. We are working on client programs, leveraging large language models with impact across software engineering, process optimisation, and customer support,” said Salil Parekh, CEO and MD in a statement.
Ahead of the quarterly earnings report, the stock of Infosys saw a modest uptick, rising by 0.41 per cent to close at Rs 1,420.55 on NSE today.
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