Infosys second-quarter earnings: Net profit jumps 12 percent, attrition at 20.1 percent.

On Wednesday, Infosys has released its second-quarter earnings and reported higher than analysts’ expectations profit and revenue on broad-based growth geographies and segments. 

The company reported an 11.8 percent rise in net profit at Rs. 5421 crore from a year earlier, on the back of solid revenue contribution from the Daimler deal, higher adoption of digital transformation by clients, broad-based growth across verticals and geographies, and strong seasonality. Additionally, it raised its revenue outlook as it bets on more contracts from global businesses expanding their digital offerings.

Infosys second-quarter earnings –

Infosys recorded an 11.8 percent increase in net profit at Rs. 5421 crore, while revenue was at Rs. 29602 crore, a rise of 20.5 percent. Additionally, it announced an interim dividend of Rs. 15 for each share. 

The company has put in place a new organizational structure that it will implement following chief operating officer Pravin Rao’s retirement in December. CEO Salil Parikh said that it would be announced internally in few weeks. 

While talking at the second-quarter earnings, Salil Parikh, CEO of Infosys, said, “We are reskilling our people and changing our delivery focus, and clients see that these changes are relevant.”

“Our operating margins for the second quarter were resilient; the impact of enhanced employee value proposition initiatives was offset by strong operating parameters, cost optimization, and operating leverage,” said Nilanjan Roy, chief financial officer, Infosys.

While talking about the IT-portal issues, Parikh said that there had been steady progress, and over 19 million IT returns have been filed. Additionally, several statutory forms are available, and 2-3 lakh users are fillings their returns daily. 

Key takeaways of Infosys second-quarter earnings –

  • The net profit is increased 11.9 percent YoY at Rs. 5421 crore as compared to Rs. 5195 crore of the previous quarter. 
  • The consolidated revenue increased to Rs. 29602 crore in the quarter compared to Rs 27,896 crore in the previous quarter, a sequential growth of 6.1 percent. 
  • Growth was broad-based across geographies and segments with the largest geography, North America growing at 23.1 percent and the largest segment, Financial Services growing at 20.5 percent, YoY in constant currency.
  • Revenue from digital business contributed 56.1 percent to total revenues and was up 42.4 percent on a YoY.
  • The employee cost of Infosys increased by 3.4 percent sequentially and by 17.5 percent YoY.
  • The attrition levels jumped to 20.1 percent from 13.1 percent sequentially.
  • Operating margins were down due to supply-side headwinds and for the quarter stood at 23.6 percent, which was ten bps lower than the previous quarter. 
  • Infosys raised the revenue growth guidance to 16.5-17.5 percent from the previous 14-16 percent. 

 

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