Infosys Q1 Net Profit Jumps 23% To Rs 5,195 Crore

The country's second-largest software services firm's large deal flows remained strong, with TCV of $2.6 billion in the first quarter.

(File Photo/ Getty)

Mumbai: Information technology major Infosys on Wednesday reported a 23% jump in its net profit to Rs 5195 crore on the back of large deal wins. The rise in profit was reported on 18% growth in revenues to Rs 27,896 crore.

The country's second-largest software services firm's large deal flows remained strong, with TCV of $2.6 billion in the first quarter.

"Driven by the dedication of our employees and the trust of our clients, we grew at the fastest pace in Q1 in a decade, at 16.9% year-on-year and 4.8% quarter-on-quarter in constant currency. I am proud of our employees, who, as 'One Infosys' demonstrate resilience and commitment in delivering for our clients. This gives us confidence to increase our revenue growth guidance to 14%-16%", said Salil Parekh, CEO, and MD, Infosys.

"As Infosys completes forty remarkable years, its continuing success and global impact are a testament to the vision of the founders and all the leaders who have shaped the company," he added.

According to its Chief Operating Officer Pravin Rao, Infosys plans to hire 35,000 college graduates globally in FY22. At the end of the June quarter, Infosys had a total employee base of 2.67 lakh, up from 2.59 lakh in the March quarter.

 "As the demand for digital talent explodes, rising attrition in the industry poses a near-term challenge. We plan to meet this demand by expanding our hiring program of college graduates for FY 22 to 35,000 globally", said Mr. Rao.

The company reported an operating margin for the quarter at 23.7%, with free cash flows growing by 15.2% yearly to Rs 6363 crore.

"We remain confident of delivering on the margin guidance, underpinned by our comprehensive cost optimization program, despite increasing cost headwinds arising largely from compensation review, talent acquisition and retention", said Nilanjan Roy, Chief Financial Officer. "Our free cash conversion was strong at 122.3% of net profit and ROE improved to 29.3%", he added.

The company has started a share buyback program through the open market route from June 25, 2021, and to date, has repurchased 9.8 million shares worth Rs 1,542 crore or 16.8% of the total authorization of Rs 9,200 crore at an average price of approx. Rs 1,569 per share (compared to maximum Buyback Price of Rs 1,750 per share).

Commenting on the results, Mr. Piyush Pandey, Lead Analyst – Institutional Equities, YES SECURITIES, said, "Revenue growth slightly better than expected at 4.7% QoQ in USD terms with cc growth at 4.8% QoQ. Growth was broad-based with some softness in the communication segment. EBIT margin was down 80 bps QoQ to 23.7% due to higher employee and sub-contracting costs. Sequential PAT growth was muted due to higher tax outgo and higher employee cost."

Ahead of the results, Infosys shares closed up 2% at Rs 1576.9 in a firm Mumbai market on Wednesday, valuing the company at Rs 671960 crore.