Infosys announces big pay hike as Q2 net vaults 20.5% to Rs4,845 cr
16 October 2020
Infosys on Wednesday reported a 20.5 per cent year-on-year growth in its fiscal second quarter (July-September 2020-21) net profit at Rs4,845 crore, on the back of a 25.4 per cent growth in its digital business.
Infosys said its Q2FY21 digital revenues stood at $1,568 million, contributing 47.3 per cent of the total revenues and showing an year-on-year growth of 25.4 per cent in constant currency.
Operating profit stood at Rs6,228 crore, showing a growth of 26.8 per cent year-on-year and 16.1 per cent sequentially. Operating margin for the quarter rose 370 basis points to 25.4 per cent.
For the quarter ended 30 September 2020, Infosys reported revenues of Rs24,570 crore, showing a growth of 8.6 per cent year-on-year and 3.8 per cent over the previous quarter.
Revenues for the July-September 2020-21 quarter grew 2.2 per cent Y-o-Y and 4.0 sequentially in constant currency terms.
Infosy also saw its free cash flow grow 78.1 per cent to Rs4,989 crore.
Basic EPS at Rs11.42 increased by 20.8 per cent year-n-year and 14.4 per cent sequentially.
Voluntary attrition of employees in the IT services segment declined to 7.8 per cent from 18.3 per cent in Q2 2020, Infosys pointed out.
“Our second quarter performance is a clear reflection of our ability to help clients on their digital transformation journeys. Our digital and cloud capabilities combined with intense client relevance are helping us achieve differentiated results in the market as is visible in 2.2 per cent year on year overall revenue growth and 25.4 per cent growth from digital offerings, which now are at 47.3 per cent of revenues”, said Salil Parekh, CEO and MD. “Increase in revenue and margin outlook for FY 21 is due to the continued trust clients have in us. I am extremely proud of our team for achieving these results in challenging business conditions globally.”
For the six months ended 30 September 2020, Infosys said its revenues stood at Rs48,234 crore, showing a growth of 8.6 per cent year-on-year.
Operating profit at Rs11,593 crore showed a growth of 23.6 per cent year-on-year.
Basic EPS at Rs21.40 shoe a growth of 17.1 per cent year-on-year.
Infosys also revised its FY 21 revenue growth guidance upward to 2-3 per cent in constant currency.
It also revised upward FY 21 operating margin guidance to 23-24 per cent
Infosys said its growth acceleration was accompanied by a 3.7 per cent YoY margin expansion while revenue and margin guidance has been revised to 2-3 per cent (in constant currency) and 23-24 per cent, respectively.
“The strength and resilience of Infosys was fully visible in Q2 with operating metrics witnessing a healthy increase, broad-based growth, highest ever large deal TCV at $3.15 billion and attrition reducing to single digits”, said Pravin Rao, COO. “Employees have been critical part of our success. As a recognition of their stellar performance, we are giving 100 per cent variable pay along with a special incentive for Q2. Additionally, we are rolling out salary increases and promotions across all levels effective Jan 1st.”
“Our relentless efforts on cost optimisation and strengthening operational efficiencies helped by certain cost deferrals led to 270 bps sequential improvement in operating margin to 25.4 per cent and a 300 bps improvement in H1 margins”, said Nilanjan Roy, CFO. “Free cash flows grew significantly in H1 driven by our consistent focus on liquidity and cash management. Consequently, we are increasing our interim dividend per share by 50 per cent to Rs12.”
Even amid global uncertainty across industries and the current medical situation, Infosys said it continued to nurture a culture of deep client relevance while building capabilities to aid them through recovery.
Among several milestones achieved in the second quarter, Consolidated Edison Company (Con Edison), one of the oldest Fortune 500 utility companies, selected Infosys to digitally transform Con Edison’s customer service capabilities over the next four years
Infosys collaborated with LANXESS, a leading specialty chemicals company headquartered in Cologne, Germany, to support the company’s IT Infrastructure digitisation strategy and enable its global workforce with a secure and fully managed modern workplace
Essential Utilities, one of the largest publicly traded water, wastewater and natural gas providers in the US, selected Infosys as a strategic partner to drive its digital transformation
Infosys has entered into a first-of-its-kind, 360 degree partnership with LivePerson, a leader in conversational AI, headquartered in New York, to transform their infrastructure and deliver industry-leading agility, scalability, and security. Infosys will also help drive penetration of LivePerson’s offerings across its client portfolio in digital marketing, e-commerce, contact center, employee engagement and shared services.
Old National Bancorp (ONB), the largest financial services bank holding company headquartered in Indiana, US, wanted Infosys to enable faster adoption of digital solutions, modernise ONB’s existing technology infrastructure, and enhance both the client and employee experience.
The National Bank of Bahrain (NBB) also selected Infosys Finacle for the digital transformation of its transaction banking business, among other fresh contracts.
Infosys also won several prestigious awards in recognition of its excellence in processes and products. Infosys Düsseldorf innovation hub was awarded with the prestigious NRW.INVEST award 2020. Infosys also won the German Brand Award 2020 for Excellence in Brand Strategy and Creation.
The company was also recognised by the Top Employers Institute, a global certification company, for exceptional standards in employee conditions across Europe for three years in a row. Infosys is also the certified Top Employer in France, Germany, Switzerland, The Netherlands and the United Kingdom.