Infosys profit up 16%, raises guidance
Infosys on Wednesday beat Street estimates, raised revenue guidance for the current fiscal and expressed confidence of a double digit growth in 2021-22.
Buoyed by large deal wins and clients opting for digital transformation in a pandemic-stricken world, the country’s second largest IT services firm has posted a 16.6 per cent growth in net profit at Rs 5,197 crore for the December quarter of 2020 compared with Rs 4,457 crore in the corresponding previous period.
Analysts had expected the company to post net profits of around Rs 5,000 crore.
Revenues also came ahead of forecasts as it gained 12.2 per cent over the year ago period to Rs 25,927 crore from Rs 23,092 crore.
In dollar terms, the topline showed a rise of 6.2 per cent at $3.5 billion. Brokerages such as Emkay had expected the dollar revenues to come in at $3.4 billion. In constant currency terms, the revenues showed a rise of 6.6 per cent.
An optimistic Infosys raised the revenue and margin forecast for this fiscal. It now expects revenue to grow 4.5-5 per cent in constant currency terms compared with its previous estimate of 2-3 per cent growth.
The operating margin guidance was raised to 24-24.5 per cent against the earlier 23-24 per cent.
At a virtual press conference after the results were announced, Infosys CEO and MD Salil Parekh said the company was confident about achieving a double digit growth in the next fiscal.
He pointed out that the strong performance during the third quarter, which is seasonally a weak period for the sector, came as its extreme focus on offerings like digital and cloud yielded good dividends.
He added that a key highlight of the quarter was a record $7.13 billion that came in from large deal signings. This included the massive deal with Daimler for a technology-driven IT infrastructure transformation.
During the quarter, Infosys had also entered into a strategic partnership with Rolls-Royce to source engineering and R&D services for the latter’s civil aerospace business.
Parekh pointed out that enterprises are now spending on activities like cloud and that Infosys is well prepared to tap this trend even as pricing remains stable.
During the third quarter, digital offerings accounted for little over 50 per cent of Infosys revenues, up from 40.6 per cent in the year ago period. In terms of verticals, financial services which accounts for 33 per cent of Infosys’ topline reported a 12 per cent rise in constant currency revenues over the same period of last year. Hi-tech led the growth charts as it reported an increase of 17.4 per cent while life sciences saw 11 per cent growth.
Ahead of the numbers, Infosys hit a fresh 52-week high of Rs 1392.70, but ended off these peaks at 1387.70-a gain of 1.16 per cent over the last close.