Infosys net profit rises 11% as firm raises revenue forecast

Company announces ₹9,300-crore share buyback, announces dividend of ₹16.50

Infosy on Thursday raised the lower end of its full-year revenue guidance citing a strong demand pipeline, after the software services provider reported second-quarter net profit rose 11.1% to ₹6,021 crore.

The company said FY23 revenue would grow 15-16%, compared with the earlier projected 14-16%.

Salil Parekh, CEO and MD, said that while concerns around the economic outlook persisted, the demand pipeline was strong as clients remained confident in the firm’s ability to deliver the value they sought, both on the growth and efficiency of their businesses. He was addressing analysts in the earnings call.

Revenue expanded 23.4% to ₹36,538 crore compared with a year earlier. In constant currency terms, revenue grew 4% over the previous quarter to $4.55 billion. Digital revenues accounted for 61.8% of the total, while increasing 31.2%. Revenue from the cloud segment crossed $1 billion in the quarter.

Mr. Parekh said total contract value for large deals at $2.7 billion was the highest in the last seven quarters. “Our strong large deal wins and steady all-round growth in Q2 reflect the deep relevance and differentiation of our digital and cloud solutions.”

Operating margin improved 140 basis points to 21.5% compared with the previous quarter on the back of a depreciating rupee and other cost optimisation moves. However, the tech firm revised the operating margin guidance downwards owing to cost pressures and now expects a margin range of 21-22% as against 21-23% earlier.

Chief Financial Officer Nilanjan Roy said, “We expect our margins to improve in the second half as attrition comes down.”