Infosys Q2 profit up 11% at ₹6,021 cr; declares dividend of ₹16.50 per share

IT services major Infosys Ltd has recorded an 11% year-on-year rise in its net profit during the July-September quarter of FY 2022-23 at ₹6,021 crore, led by digital and cloud services. The company's consolidated revenue grew 23.4% YoY to ₹36,538 crore during the said quarter.

The Infosys share closed at ₹1,422, down 6.70 or 0.47%, on the NSE today. Infosys said its board has also approved a share buyback proposal worth ₹9,300 crore at ₹1,850 per equity share via an open market route, subject to shareholders' approval. The board also declared an interim dividend of ₹16.50 per share vs the FY22 interim dividend of ₹15. The total amount of the interim dividend payout will be around ₹6,940 crore.

Infosys' revenues in constant currency grew 18.8% YoY and 4.0% QoQ. Digital revenue comprised 61.8% of overall revenues and grew at 31.2% in constant currency. Infosys' operating margin stood at 21.5%, a decline of 2.1% YoY and an increase of 1.4% QoQ. The basic earnings per share stood at ₹14.35, a growth of 11.5% YoY.

However, Infosys has revised its FY23 revenue guidance to 15%-16% from 14-16% earlier on concerns around the macroeconomic outlook. The operating margin guidance has also been revised to 21%-22% from 21-23% earlier. “While concerns around the economic outlook persist, our demand pipeline is strong as clients remain confident in our ability to deliver the value they seek, both on the growth and efficiency of their businesses. This is reflected in our revised revenue guidance of 15%-16% for FY 23,” said Salil Parekh, CEO and MD, Infosys.

As per Infosys, the large deal TCV (total contract value) for the said quarter was robust at $2.7 billion, which is the highest in past 7 quarters.

Infosys' total employee headcount as of September 30, 2022, stood at 3,45,218, up from 3,35,186 during the previous quarter and 2,79,617 during the same quarter last year.

Infosys' attrition rate, like its peers, remains high at 27.1% as of September 30, 2022, though it has declined from the previous quarter's attrition rate of 28.4%. The company's attrition rate during Q2 FY22 was 20.1%. Among its peers, Infosys' attrition rate remains the highest.

Nilanjan Roy, Infosys CFO says while supply-side challenges are gradually abating as reflected in the reducing attrition rates, they continue to exert pressure on the company's cost structure.

Infosys peers HCL Tech, TCS, and Wipro have also announced their quarterly financial results recently. Barring Wipro, all the tech majors reported growth in net profit on a YoY basis. HCL Tech reported a 7.05% rise in its Q2FY23 profit at ₹3,489 crore, while its revenue grew 19.5% on a YoY basis at ₹24,686 crore. Wipro's profit stood at ₹2,659 crore in the said quarter, a 9% year-on-year drop from ₹2,930 crore in the year-ago period. TCS saw its Q2 profit growing at 8.4% YoY ₹10,431 crore, while its revenue jumped 18% YoY to ₹55,309 crore.

Also, HCL Tech's attrition rate stands at 23.8%, while TCS' attrition rate was 21.5% on an annualised basis as of Q2 FY23. Wipro's attrition rate, measured in trailing 12 months for the quarter, stood at 23%.