Infosys on Thursday reported a strong, double digit growth of 11.1 percent on-year in net profit for the fiscal second quarter, beating street estimates. The net profit came in at Rs 6,021 crore, as compared to Rs 5,421 crore in the same period previous year. The information technology behemoth’s board of directors also approved the buyback proposal for the fully paid-up equity shares of the face value of Rs 5. The fourth buyback since 2017 aggregates to Rs 9,300 crore, Infosys said while announcing its Q2 earnings. The consolidated revenue in constant currency terms was reported at Rs 36,538 crores, reflecting a spike of 23.4 per cent on-year. Analysts from several brokerage firms had projected a 23-24 per cent on-year rise in the consolidated revenue, while a 6-9 per cent rise on-year for net profit.
The operating margin of the IT bellwether was reported at 21.5 per cent, growing by 1.4 per cent on-quarter. However, the operating margins showed a 2.1 per cent decline when compared to the previous year’s level. “Operating margins in Q2 expanded sequentially by 150 bps, helped by our operational rigour. While supply challenges are gradually abating as reflection in the reducing attrition rates, they continue to exert pressures on our cost structure, “said Nilanjan Roy, Chief Financial Officer.
Infosys’ board of directors also declared an interim dividend of Rs 16.5 per equity share, from the Rs 15 per equity share dividend announced in the previous fiscal second quarter. The record date for the payment is set as October 28 while the dividend will be paid on November 10, 2022. Financial services, at 30.5 per cent contribution, remained the largest business segment of the IT giant, followed by retail, 14.2 per cent, and communication, 12.3 per cent. But, the contribution of the three leading segments marginally dipped while sectors such as manufacturing and life science saw an uptick.
“Our strong large deal wins and steady all-round growth in Q2 reflect the deep relevance and differentiation of our digital and cloud solutions for clients as they navigate their business transformation. While concerns around the economic outlook persist, our demand pipeline is strong as clients remain confident in our ability to deliver the value they seek, both on the growth and efficiency of their businesses. This is reflected in our revised revenue guidance of 15%-16% for FY 23,” said Salil Parekh, CEO and MD. Infosys stock ended down 0.47 per cent at Rs 1,422 per share today, ahead of results announcement.