Infosys Q2 earnings: From deal wins, client additions to attrition; key things to know

By: | Published: October 16, 2018 5:24 PM

In the latest quarter IT behemoth Infosys reported results in-line with estimates aided by large deal wins and robust digital growth.

Infosys has reported a 10.3% rise in net profit to Rs 4,110 crore.

In the latest quarter IT behemoth Infosys reported results in-line with estimates aided by large deal wins and robust digital growth. Infosys has reported a 10.3% rise in net profit to Rs 4,110 crore. “Operating Cash Flow was over $1 billion during the first half of the year and ROE was at 24.7%. We will continue to make strategic investments in digital to leverage opportunities and at the same time keep sharp focus on key operational efficiency parameters,” CFO MD Rangnath noted. We take a closer look at 4 key takeaways from Infosys Q2 results other than earnings. 

Rise in gross client additions

The company’s gross client additions came in at 73 in the July-September quarter, as compared to 70 in the previous quarter. The company has a total of 1,214 clients as on September-18.

Attrition falls marginally

In the quarter under review, annualized standalone employee attrition reduced marginally to 19.9% as compared to quarter annualised standalone employee attrition of 20.6% in the previous quarter. The revenue per employee fell marginally to $54.7 in Setember from $54.9 in June.

Update on Rajiv Bansal severance pay issue

After Infosys was asked to cough up Rs 12.17 crore along with interest, after the arbitration panel ruled in favour of former CFO Rajiv Bansal, the company said that it has taken legal advice and will comply with the award and make the necessary payments.

Large deal wins

The large deal wins of the company crossed $2 billion in the latest quarter. “Large deal wins at over $2 billion during the quarter demonstrate our increased client relevance and also give us better growth visibility for the near-term,” Infosys CEO Salil Parekh noted.

Infosys CEO Salil Parekh take

“We are delighted with our broad-based growth across all business segments and geographies during the quarter. This is a testimony to our strong client relationships, digital led full service capabilities, and intense focus on the needs of our clients”, Salil Parekh, CEO and MD said.

Emkay Global’s view on stock

“Infosys maintaining its growth guidance at 6-8% for FY19 despite reinvestment of entire currency gains back into business indicate significant growth challenges going forward.  Strong order book growth may revive growth rate in FY20 however, significant investments would mean no traction on earnings growth. We believe that improved growth at cost of lower profitability would lead to structural de-rating in the stock and thus we maintain our negative view on the stock post Q2FY19 earnings and may review our estimates post the earnings call today at 6:30pm,” said the firm.

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