Infosys Q3 net profit falls 7.3% to ₹6,106 cr

Net profit of Infosys Ltd witnessed a 7.3% year-on-year (YoY) dip to ₹6,106 crore for the quarter ended December 31, 2023, compared with ₹6,586 crore in the year-ago period. 

Consolidated revenue increased 1.3% year-on-year to ₹38,821 crore in the third quarter as against ₹38,318 crore in the corresponding quarter last fiscal.

India's second-largest software services company narrowed its revenue growth guidance to 1.5-2% for 2023-24. At the start of 2023, the IT firm had projected its revenue guidance to be in the range of 4-7% for FY24. On July 20, 2023, Infosys scaled down its guidance between 1% and 3.5% for the ongoing financial year. The company further slashed the upped-end of its revenue growth guidance to 2.5% in October last year.

The operating margin for the IT giant was 20.5% for the quarter ended December, a sequential decline of 70 basis points. The operating margin guidance was kept at 20%-22%.

The third quarter is traditionally a challenging period for IT enterprises due to the detrimental effects of furloughs and fewer working days.

“Infosys delivered $4,663 million in Q3 revenues with year-on-year and sequential decline of 1.0% in constant currency. Large deal TCV for the quarter was $3.2 billion, with 71% being net new. Operating margin for the quarter was 20.5%, a sequential decline of 70 bps. Attrition declined further to 12.9%. FY24 revenue guidance revised to 1.5%-2.0% and operating margin guidance at 20%-22%,” the company says.

Infosys' attrition declined further to 12.9%.

“Q3 performance is a demonstration of our strong execution capabilities reflected in improved operational efficiencies achieved under ‘Project Maximus’, despite a challenging environment. Cash generation remained robust with FCF to net profit conversion for Q3 at 90.6%,” says Nilanjan Roy, Chief Financial Officer, Infosys.

Salil Parekh, CEO and managing director at Infosys, says, “Our performance in Q3 was resilient. Large deal wins were strong at $3.2 billion, with 71% of this as net new, reflecting the relevance and strength of our portfolio of offerings ranging from generative AI, digital and cloud to cost, efficiency and automation. Our clients are leveraging our Topaz generative AI capabilities and our Cobalt cloud capabilities to create long-term value for their businesses.”

Infosys today announced an agreement to acquire InSemi, a semiconductor design and embedded services provider. "This strategic investment further strengthens Infosys’ Engineering R&D capabilities and demonstrates its continued commitment to co-create with global clients to help them navigate their digital transformation journey," the company says.

"This collaboration will help accelerate Infosys’ Chip-to-Cloud strategy, by bringing niche design skills at scale and will also pair seamlessly with existing investments in AI/Automation platforms and industry partnerships. The collaboration will aim to orchestrate comprehensive end-to-end product development for clients," the IT firm says.

Founded in 2013, InSemi offers end-to-end semiconductor design services with expertise across electronic design, platform design, automation, embedded and software technologies. It serves global corporations across semiconductor, consumer electronics, automotive, and hi-tech industries.