Infosys reports 6.6% YoY CC growth in Q3, Digital crosses 50% of revenues

Infosys reported its highest Q3 sequential growth of 5.3% in 8 years in constant currency. On a year on year basis, revenues grew by 6.6%, digital revenues grew by 31.3% and overall digital revenue crossed more than half of total revenues. Large deal TCV was at all time high of $7.13bn with 73% being net new. Strong and steady operating margin at 25.4%. Revenue and margin guidance band increased to 4.5%-5.0% and 24.0%-24.5% respectively on the back of continued strong performance.

“The Infosys team has delivered another quarter of excellent results. Execution of client relevant strategy focused on digital transformation continues to drive superior growth, well ahead of the industry. The scale of new client partnerships with leading global companies such as Vanguard, Daimler and Rolls-Royce demonstrate the depth of digital and cloud capabilities of Infosys. The commitment and skills of our employees to support and drive the digital journey of clients are matters of great pride for me”, said Salil Parekh, CEO and MD. “With the intense focus on client needs and the comprehensive foundation built on differentiated capabilities, I remain confident about the future.”

• Q3 revenues grew year-on-year by 12.3% in INR; grew by 6.6% in constant currency
• Digital revenues cross 50% of total revenue, year-on-year growth of 31.3% in constant currency
• Q3 operating margin at 25.4%, year-on-year increase of 350 bps
• Robust Q3 net profit at Rs 5,197 crore, year-on-year growth of 16.6%
• Continued strong Q3 free cash flow at Rs 5,683 crore; year-on-year growth of 19.4%; FCF conversion at 109.0% of net profit
• Q3 voluntary attrition for IT services declined to 10.0% from 15.8% in Q3 20
• Year-to-date revenues grew by 3.5% in constant currency • Year-to-date operating margin at 24.5%, an expansion of 310 bps
• FY 21 revenue growth guidance increases to 4.5%-5.0% in constant currency

FY 21 operating margin guidance increases to 24.0%-24.5%

“The resilience of Infosys has been severely tested over the past several quarters and I am delighted with our response marked by strong revenue performance, large deal wins, healthy operating metrics and continued low attrition”, said Pravin Rao, COO, Infosys.