Infosys on Wednesday not only beat analysts’ estimates for the December quarter earnings, it also increased FY22 revenue guidance to 19.5%-20.0% from the earlier 16.5%-17.5%. The IT major retained the margin guidance of 22-24%. Revenues, in constant currency terms, clocked a sequential growth of 7% in Q3FY22, but the operating margin stayed flat, falling 0.1% to 23.5%. Net profits at 5,809 crore rose 7.2% over the preceding quarter. The deal pipeline remained robust with the company reporting a total contract value of $2.53 billion during the quarter. CEO and MD Salil Parekh expects healthy technology spends to continue with large enterprises progressing on their digital transformations. Parekh said execution had been very strong and that enabled the firm to increase our guidance. “Large deals of $2.5 billion is a very strong indicator of how business is evolving,” he said. Consolidated revenues during the period jumped 7.7% on a sequential basis to31,867 crore. Operating income grew by 7.3% to Rs 7,484 crore.
The number of active clients increased from 1,562 a year ago to 1,738 during the quarter. The top five clients now account for 12% of revenues against 10.8% a year ago and 11.4% in the September quarter.
On the downside, voluntary attrition has increased to 25.5%from 11% a year ago and 20% in the previous quarter. Chief financial officer Nilanjan Roy believes attrition would stabilise once freshers join in the coming months. “We have seen in this quarter some stabilisation, but we will have to wait and see,”Roy added.
Infosys expects the growth momentum to sustain as it is seeing digital transformation rapidly scaling across verticals and regions. Digital revenues now account for 58.5% of the company’s revenues.