Infosys reports growth acceleration in Q1 to 16.9% YoY and 4.8% QoQ

Infosys has reported large deal momentum strong with $2.6 billion TCV revenue guidance for financial year 22 revised to 14% to 16%

Infosys reported a strong Q1 performance with year on year growth accelerating to 16.9% and sequential growth increasing to 4.8% in constant currency. Large deal flows remained strong with TCV of $2.6 billion in Q1. Operating margin for the quarter was robust at 23.7%, with Free Cash Flows growing by 15.2% year on year.

“Driven by the dedication of our employees and the trust of our clients, we grew at the fastest pace in Q1 in a decade, at 16.9% year-on-year and 4.8% quarter-on-quarter in constant currency. I am proud of our employees, who as ‘One Infosys’ demonstrate resilience and commitment in delivering for our clients. This gives us confidence to increase our revenue growth guidance to 14%-16%”, said Salil Parekh, CEO and MD, Infosys.

Key Highlights of Infosys Results

  • Revenues in CC terms grew by 16.9% YoY and 4.8% QoQ.
  • Reported revenues at Rs 27,896 crore, growth of 17.9% YoY.
  • Digital revenues at 53.9% of total revenues, YoY CC growth of 42.1%.
  • Operating margin at 23.7%, increase of 1.0% YoY and decline of 0.8% QoQ.
  • Basic EPS at Rs 12.24, growth of 22.6% YoY.
  • FCF at `6,363 crore, YoY growth of 15.2%; FCF conversion at 122.3% of net profit.

“Employee wellbeing is of paramount importance to us and we have had multiple interventions in this regard including facilitating vaccination for them and their dependents. We rolled out several intense employee engagement initiatives including career acceleration opportunities, compensation reviews and learning and development interventions. Our clients continue to be supportive of the multiple initiatives we have undertaken; they value the delivery commitments we have met even during these extraordinary times”, said Pravin Rao, chief operating officer, Infosys. “As the demand for digital talent explodes, rising attrition in the industry poses a near-term challenge. We plan to meet this demand by expanding our hiring program of college graduates for FY 22 to ~35,000 globally”, he added.

Pursuant to the Board recommendation and subsequent to shareholders’ approval in the AGM, the company has started share buyback program through open market route from 25 June 2021 and till date, has bought back 9.8 million shares worth Rs 1,542 crore or 16.8% of total authorization of Rs 9,200 crore at an average price of approximately Rs 1,569 per share (compared to maximum Buyback Price of Rs 1,750 per share).

“We remain confident of delivering on the margin guidance, underpinned by our comprehensive cost optimization program, despite increasing cost headwinds arising largely from compensation review, talent acquisition and retention”, said Nilanjan Roy, chief financial officer. “Our free cash conversion was strong at 122.3% of net profit and ROE improved to 29.3%”, he added.

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