Infosys Q3 Results Highlights: Profit rises by 11.46% YoY to Rs 6806 cr, revenue up 7.58%; FY25 revenue guidance revised

Sagar Shetty, Research Analyst, StoxBox, said, “Infosys reported healthy financials in Q3FY25, surpassing street estimates across all fronts. The company recorded impressive revenue growth, led by comprehensive growth across segments, offsetting the seasonal impact. The robust recovery in the BFSI segment was a key highlight during the quarter. An uptick in margins was primarily attributed to benefits from improving realization and scale. Strong emphasis on cash flow management resulted in a free cash conversion to net profits of 157% in Q3, with free cash generation for 9MFY25 surpassing that of the entire FY24.”

“The notable revision of revenue growth guidance to 4.5-5% from 3.75-4.5% reflects an increase on both ends of the range scale, underscoring a potential bounce back in growth momentum. TCV stood at $2.5 billion (down 22% YoY); however, the company remains confident going ahead, backed by an improved deal pipeline. The management’s view on the discretionary spending, deal conversion outlook, and commentary on deal wins and pipeline going ahead would be key to gauge changes in the dynamics of the demand environment,” he added.

Jayesh Sanghrajka, CFO, Infosys, said, “We had another quarter of strong performance with revenue growth across segments and operating margin expansion, leading to 11.4% EPS growth year on year in rupee terms. Our structured approach to operating margin expansion yielded more results in Q3, particularly due to benefits from improving realization and scale benefits. Our sharp focus on cash flow is reflected in free cash conversion to net profits of 157% in Q3 with free cash generation for 9 months of FY25 surpassing that of entire FY24.”

• Revenues in CC terms grew by 6.1% YoY and 1.7% QoQ

• Reported revenues at Rs 41,764 crore, up 7.6% YoY

• Operating margin at 21.3%, increase of 0.8% YoY and 0.2% QoQ

• Basic EPS at Rs 16.43, growth of 11.4% YoY

• FCF at Rs 10,647 crore, growth of 91.9% YoY; FCF conversion at 156.1% of net profit

Infosys’ attrition rate stood at 13.7 per cent for the quarter ended December 2024. It said that the company headcount increased for the second consecutive quarter by 5,591 and it was at 323,379 and the percentage of women employees stood at 39.0 per cent. Read More

Salil Parekh, CEO and MD, Infosys, said, “Our strong revenue growth sequentially in a seasonally weak quarter and broad-based year on year growth, along with robust operating parameters and margins, is a clear reflection of the success of our differentiated digital offerings, market positioning, and key strategic initiatives. We continue to strengthen our enterprise AI capabilities, particularly focusing on generative AI, which is witnessing increasing client traction. This has led to another quarter of strong large deal wins and improved deal pipeline giving us greater confidence as we look ahead.”

Infosys on Thursday announced its quarter results for Q3FY25 with profit at Rs 6806 crore, posting a growth of 11.46 per cent in comparison to Rs 6106 crore recorded during the same period of previous financial year., surpassing estimates. It posted revenue from operations at Rs 41,764 crore, up 7.58 per cent as against Rs 38,821 crore posted during the third quarter of FY24. The company EBIT stood at Rs 8912 crore.

According to a CNBC TV18 poll, Infosys was expected to post revenue for the third quarter of FY25 at Rs 41,281 crore and profit for the quarter in review was estimated at Rs 6753 crore.

ICICI Securities said, “We expect deal TCV to be in line with the quarterly average TCV run-rate seen in the past two quarters with no mega deal signings in Q3FY25. We expect TCS to report deal TCV of USD 7bn–9bn. For Mphasis, we expect its OB to be ~USD 300mn. We expect Persistent’s OB to be flattish on a YoY-basis and strong on a QoQ-basis aided by renewal components. We expect strong large deal wins for LTTS in Q3, which would be ramping up in Q4 – needed to achieve its FY25 revenue guidance of 8-10% YoY CC.”

JM Financial said that Q3FY25 for the IT sector will be indented by furloughs and its impact will likely be similar to last years’. “Discretionary spend is still restricted to a few pockets. Semblance of stability in the manufacturing vertical is balanced by rising caution in Lifesciences’. Sequential decline implied in Accenture’s Q2 guide offers some clue of likely Q3 trajectory. In summary, we expect a muted (0.5)-1.4% cc QoQ growth for large-caps (ex-HCL Tech). We expect 10-50 bps QoQ margin expansion across top-5. Among mid-caps, we expect Persistent Systems/ Coforge to outpace larger peers again. Q3 performance is seldom a reflection of underlying demand. Client budgets, deal wins and uptick in short duration deals would be a better gauge,” the analysis report by the brokerage firm said.

ICICI Securities said that Infosys is expected to raise FY25 revenue growth guidance to 4–4.75 per cent, from 3.75–4.5 per cent.

ICICI Securities said, “We build in 0.1% USD/0.7% CC QoQ revenue growth. We expect revenue growth to be led by BFSI, technology and energy & resources. We expect EBIT margin to decline ~18bps on furloughs and lower working days, partially offset by tailwinds from rupee depreciation. In terms of key monitorables, the brokerage firm said that investors will keep an eye on announcements on any tweak on FY25 revenue growth guidance, client budgets for CY25, enterprise discretionary spending, and pricing pressures.

In an analysis report, ICICI Securities said, “While clients are still cautious on IT spending, cost efficiency focus and deal consolidation will continue, and we expect traction in financial services, technology and energy resources to continue from Q2. In terms of deal TCV, we expect the quantum of shorter deals to further improve indicating incremental recovery in demand. We expect margins to be flat QoQ and the full year margin is expected to be within guidance range of 20-22 per cent.

Today, majors like Reliance Industries, Infosys, LTIMindtree, Metro Brands, Waaree Renewable Technologies, Sterling and Wilson Renewable Energy, Spencer Retail, Khaitan Chemicals and Fertilizers, Shemaroo Entertainment, Axis Bank, Havells India, Hatsun Agro Products, DB Corp, and others, will release their third quarter earnings for FY25.