Infosys shares zoom over 7% on strong Q1 earnings
15 July 2019
Infosys shares rallied 7.2 per cent (or Rs52.35) to close at a record Rs779.45 on the Bombay Stock Exchange (BSE) today, on the back of strong Q1 performance even as the company started FY20 on a strong note with constant currency revenue growth of 12.4 per cent YoY.
Infosys. India's second largest IT services firm, on Friday reported strong performance in earnings and revenue for the April-June 2019-20 quarter and announced plans to recruit 18,000 people from campuses this fiscal.
Bengaluru-based Infosys posted a net profit of Rs3,802 crore and maintained its operating margin guidance for 2019-2020 in the range of 21 per cent to 23 per cent.
Revenue from operations rose 14 per cent to Rs21,803 crore. Infosys raised its revenue growth guidance for the fiscal to 31 March 2020 to be between 8.5 per cent and 10 per cent, from the 7.5 per cent to 9.5 per cent range it had projected earlier.
The company also raised its revenue forecast for the year on upbeat demand for digital services backed by record deal wins of $2.7 billion in the quarter.
Infosys has revised its capital allocation policy upwards to distribute about 85% of free cash flows cumulatively over a 5-year period, from 70 per cent earlier, a move which is positive for the stock, say analysts.
Infosys, which has over 2.29 lakh employees, is also battling high attrition. The company, however, said there was no impact of attrition on its deliverables and that historically, the first quarter of the fiscal has a higher level of attrition
"Overall for this quarter, we have recruited close to 8,000 people, of which freshers are about 2,500... For the year, we are looking at about 18,000 people or so from the universities," Infosys chief operating cfficer UB Pravin Rao said.
Infosys added 906 people (net) during the June 2019 quarter. The attrition (annualised consolidated) was at 23.4 per cent up, compared to 20.4 per cent for the quarter ended March 2019.
Infosys has initiated a number of measures for employee engagement, investment in career opportunities and enrichment of experience for employees, he said.