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Infosys Q1 profit jumps 11.5% to Rs 4,233 crore, pegs FY21 revenue growth at 0-2%

Infosys has forecasted 0-2 per cent revenue growth in constant currency terms for the current financial year, while the operating margin is expected to remain in the range of 21-23 per cent

Chitranjan Kumar | July 15, 2020 | Updated 19:07 IST
Infosys Q1 profit jumps 11.5% to Rs 4,233 crore, pegs FY21 revenue growth at 0-2%
Ahead of Q1 earnings, shares of Infosys closed Wednesday's trade at Rs 831.45, up 6.16 per cent, on the BSE

Infosys, the country's second largest software exporter, on Wednesday reported 11.5 per cent growth in consolidated net profit (after minority interest) at Rs 4,233 crore for the first quarter ended June 30, 2020, as against Rs 3,798 crore in the same period last year. On the quarter-on-quarter basis, the profit fell 2 per cent from Rs 4,321 crore in March quarter of FY20.

The IT major surprised the market by giving full year constant currency revenue growth guidance amid COVID-19 pandemic. Infosys has forecasted 0-2 per cent revenue growth in constant currency terms for the current financial year while the operating margin is expected to remain in the range of 21-23 per cent.

The Bengaluru-based company has posted consolidated revenue of Rs 23,665 crore in June quarter of 2020 versus Rs 21,803 crore in the year ago period, registering a growth of 8.5 per cent. On a sequential basis, revenue rose 1.7 per cent from Rs 23,267 crore in the previous quarter.

In dollar terms, net profit rose 2.3 per cent YoY to $558 million, while revenue fell 0.3 per cent YoY to $3,121 million during the June quarter of this fiscal over the year-ago period, Infosys said in a filing to the Bombay Stock Exchange.

Revenue from digital services stood at $1,389 million, which was 44.5 per cent of total revenues, Infosys said.

"Our Q1 results, especially growth, are a clear testimony to the relevance of our service offerings and deep understanding of clients' business priorities which is resonating with them in these times. It also demonstrates the remarkable dedication of our employees and leadership during this period", said Salil Parekh, CEO and MD.

"Our confidence and visibility for the rest of the year is improving driven by our Q1 performance and large deal wins," he added.

During April-June quarter, the operating profit surged 20 per cent YoY to Rs 5,365 crore, while margin increased by 220 basis points YoY to 22.7 per cent.

"Operating margin expanded to 22.7 per cent driven by preemptive deployment of our strategic cost levers along with tactical opportunities triggered by the COVID situation", said Nilanjan Roy, CFO.

Infosys saw voluntary attrition for IT services declining to 11.7 per cent from 20.2 per cent in Q1 FY20.

"Collections were robust and capex was focused,which led to 50 per cent year on year increase in Free Cash Flows. Our liquid and debt free Balance Sheet is a huge source of strength in these times," he added.

During the quarter under review, Infosys' active client base stood at 1,458, up from 1,411 in the previous quarter. It added two clients in $10 million+ band, 11 clients in $1 million+ category, but lost three clients in $100 million+ band and one client in $50 million+ category.

Based on the recommendation of the Nomination and Remuneration Committee, Infosys' board has appointed Bobby Parikh as an additional and Independent Director effective July 15, 2020, for a period of 3 years, subject to the approval of shareholders.

Ahead of Q1 earnings, shares of Infosys closed Wednesday's trade at Rs 831.45, up 6.16 per cent, against previous closing price of Rs 783.20 on the BSE.

Also Read: Infosys stock hits all-time high ahead of Q1 earnings, check what brokerages say

Also Read: Infosys Q1 preview: Revenue may fall 5%; eyes on demand impact due to coronavirus

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