Infosys Q1 net rises 3.2%, lower than estimates

Rising expenses hit operating margins

India's second-largest IT services firm Infosys reported a lower-than-estimated 3.2% rise in June quarter net profit to ₹5,360 crore as operating margin declined on rising expenses.

Revenue rose 23.6% to ₹34,470 crore in April-June - the first quarter of the current fiscal year.

Infosys raised its full-year FY23 (April 2022 to March 2023) revenue guidance to 14-16% from the 13-15% it had projected earlier, backed by Q1 growth, and a strong demand outlook.

Sequentially, the profit declined 5.7% from ₹5,686 crore in the January-March quarter.

Operating margin declined to 20.1% in the first quarter of the current fiscal when compared with a 23.7% a year earlier and 21.5% in January-March. Operating expenses rose 14.4%, as selling and marketing cost went up.

The street was expecting a 5.5% to 9.5% year-on-year growth in consolidated net profit. Sequentially, analysts had expected a drop in earnings but by less than 1%.

"Our strong overall performance in Q1 amidst an uncertain economic environment is a testament to our innate resilience as an organisation, our industry-leading digital capabilities and continued client-relevance," Salil Parekh, CEO and MD of Infosys, said in a statement.