Rama Krishna Sangem
In a good news, Infosys, India’s second-largest software exporter by revenue, raised its revenue guidance upwards for the financial year 2024-25 to 3 per cent to 4 per cent. This is upward from the 1-3 per cent that the company guided in Q4 of FY24. With Infosys revising its revenue guidance upwards, it signals better spending from clients.
The company reported a 7.1 per cent year-on-year (Y-o-Y) increase in its net profit at Rs 6,368 crore for the first quarter of 2024-25 (FY25), above the consensus Bloomberg estimates of around Rs 6,248.4 crore. Sequentially, net profits were down 20.4 per cent.
Revenue for the quarter grew by 3.6 per cent Y-o-Y to approximately Rs 39,315 crore, above the consensus Bloomberg estimate of around Rs 38,810 crore. Sequentially, revenue was up 3.7 per cent as clients.
The company has also guided its operating margin to 20-22 per cent for FY25.
“We had an excellent start to FY25 with strong and broad-based growth, operating margin expansion, robust large deals, and highest ever cash generation. This is a testimony to our differentiated service offerings, enormous client trust, and relentless execution,” said Salil Parekh, managing director and chief executive officer, Infosys.
He further added: “With our focused approach for generative AI for enterprises working with their data sets on a cloud foundation, we have strong traction with our clients. This is building on our Topaz and Cobalt capabilities.”
India, EU lead the growth
In terms of growth drivers for this quarter, Europe, India, and the rest of the world grew strongly. Europe growth was up 9.1 per cent Y-o-Y, India grew 19.9 per cent, and RoW was up 2.3 per cent.
However, the two largest revenue generators, the US and BFSI, continued to be subdued. The US was down 1.2 per cent and BFSI managed to be flat with 0.3 per cent growth.
Revenues from retail declined 3 per cent in constant currency, contributing 13.8 per cent to the total revenues for the June quarter.
The company also improved its margins to 21.1 per cent. “Our relentless drive on cost optimisation through Project Maximus, a comprehensive margin expansion programme, is reflected in the all-round improvement in key operating metrics leading to 1.0 per cent growth in operating margin in Q1,” said Jayesh Sanghrajka, CFO. “We had the highest ever FCF generation at $1.1 billion and ROE increased to 33.6 per cent due to higher payouts to investors,” he added.
This shows, India’s earlier poster boy of IT sector is doing well and will fare better next year.
