Infosys posts 8% profit rise in Q4

Indian IT major Infosys has given guidance for a 4-7% revenue growth in FY24, marking the first time since FY16 that it has guided for single-digit revenue growth in constant currency terms.

This comes after Infosys missed its own revenue guidance for the full year FY23, reporting growth of 15.4% in constant currency terms, lower than the guidance of 16-16.5% it had given at the end of Q3.

The company also reported a revenue degrowth of 2.2% sequentially in dollar terms for the fourth quarter, and a 3.2% decline in constant currency terms. CEO Salil Parekh cited an “uncertain environment” for the low guidance for FY24.

Infosys also guided for an operating margin of 20-22% for FY24, after operating margin for FY23 stood at 21% in dollar terms, while the digital business grew at 25.6% in constant currency terms.

During the March quarter, Infosys bagged $2.1 billion worth of large deals, lower than the $3.3 billion wins in the previous quarter. Its client base in the over $50 million category reduced by 4, while it added two clients in the over $100 million category.

Explaining why the company missed its own revenue guidance, Parekh said that it was due to “ramp downs which were unplanned”, and that this was across sectors, including telecom, high-tech, retail, mortgages, asset management and investment banking.

Geographically, Europe outpaced North America by a wide margin, with constant currency revenue growing at 20.3% in Europe as compared to 6% in North America. North America’s share in Infosys’ total revenue also dipped from 62% at the end of Q3 to 61% at the end of Q4, while Europe’s share increased from 25.8% to 27%.

Infosys declared a final dividend of ₹17.5 per share, with the record date being June 2, 2023. Parekh said that as the environment has changed, Infosys sees strong interest from its clients for efficiency, cost and consolidation opportunities, resulting in a strong large deal pipeline. –

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