Infosys Q3 net vaults 23.5% to Rs4,457 crore
10 January 2020
Infosys Ltd, India’s second-biggest information technology services provider, has reported a net profit of Rs4,457 crore ($628.2 million) for fiscal third quarter ended 31 December 2019 - a 23.5 per cent year-on-year increase from Rs3,609 crore a year earlier.
Revenue for the October-December 2019-20 quarter increased 7.9 per cent to Rs23,092 crore, on the back of higher revenue from its banking software.
Q3 revenues grew 7.9 per cent in rupee terms and by 9.5 per cent year-on-year in constant currency and by 2 per cent in rupee terms and 1 per cent in constant currency, respectively, sequentially.
Year-to-date, revenues grew by 11.1 per cent in constant currency
Infosys saw its Q3 digital revenues rising to $1,318 million, forming 40.6 per cent of total revenues - an year-on-year growth of 40.8 per cent and a sequential growth of 6.8 per cent in constant currency.
Q3 operating margin was higher at 21.9 per cent, which is a 20 bps improvement over Q2 FY20. Year-to-date operating margins stood at 21.4 per cent, within the margin guidance for the year.
“Q3 results further underscore that we remain steadfast in our journey of sustained client relevance and deepening engagement with them, as they partner with us in navigating their next in the digital transformation era”, said Salil Parekh, CEO and MD. “For us, this has translated into double digit growth year-to-date, leading to an increase in revenue guidance, accompanied by expanding operating margins.”
Infosys also increased its FY 20 revenue guidance to 10.0-10.5 per cent in constant currency, while maintaining operating margin guidance range at 21-23 per cent.
“Overall performance during the quarter was satisfactory on multiple counts – broad-based growth, steady increase in client metrics and healthy large deal wins”, said Pravin Rao, COO. “Large deal wins continue to be robust with growth of 56 per cent so far this year. We had a further reduction in attrition, demonstrating the results of our continued efforts towards strengthening employee engagement and value proposition.”
Infosys CFO Nilanjan Roy said the company’s operating margins improved further during the quarter driven by relentless cost optimisation and operating leverage.
“Cash generation was extremely strong with cumulative free cash flow crossing $ 1.5 billion. Return on equity increased further to 25.9 per cent driven by margin expansion and increased shareholder payouts,” he said.
During the quarter Infosys signed a partnership deal with Mars, under which Infosys will develop a Digital Supply Chain initiative focused on improving the ongoing market traceability of all Mars products.
The company also signed a deal with ABN AMRO Bank, for developing an IT transformation infrastructure for the banking company.
“Infosys’ strategic investment in Cloud, Digital and DevOps has helped create best in class solutions and we are confident that this partnership will help us transform our IT environment in a timely and cost-effective way,” Christian Bornfeld, chief innovation and technology officer (Group COO) and executive board member at ABN AMRO Bank, said.