Infosys’ financial results come at a time when high levels of attrition leading to higher labor costs are hurting the profitability of IT companies, despite increased technology spending across all industries.
Infosys – India’s second-largest software exporter by market value – posted a 5.7% sequential drop in net profit to Rs 5,360 crore for the three-month period, below Street expectations .
Analysts in a CNBC-TV18 poll had estimated the IT giant’s quarterly net profit at Rs 5,677 crore and revenue at Rs 34,160 crore.
Dollar revenue was $4,444 million, up 3.8% quarter on quarter and above analysts’ expectations of 3.3% growth.
Its constant-currency revenue growth — or revenue excluding the impact of currency fluctuations — was 5.5% in the quarter, better than estimates from Street as well as its peers.
“Our strong overall performance in the first quarter (April-June) in an uncertain economic environment is a testament to our innate resilience as an organization, our cutting-edge digital capabilities and our continued relevance to our customers. We continue to gain share market share and see a significant pipeline driven by our Cobalt cloud capabilities and differentiated digital value proposition,” said Salil Parekh, CEO and Managing Director of Infosys.
“We invest in the rapid expansion of talent while ensuring rewarding careers for our employees, to better serve ever-changing market opportunities. This translated into a strong first quarter performance and increased revenue guidance for FY23,” he added.
Infosys reported an EBIT margin – a key measure of profitability determining a company’s operating profit as a percentage of revenue – of 20.1 percent, down 140 basis points from the prior quarter.
Analysts had pegged the company’s margin at 21%.
Shares of Infosys ended down 1.7% at Rs 1,506.3 apiece on BSE on Friday, ahead of the earnings announcement. The title, however, recorded a weekly gain.
(Edited by : Sandep Singh)