New Delhi, 18 April

IT company Infosys on Thursday said its consolidated profit jumped 30 per cent to Rs 7,969 crore in the March 2024 quarter. The company posted a profit of Rs 6,128 crore in the year-ago period, according to a regulatory filing.

The consolidated revenue of Infosys during the quarter increased 1.3 per cent to Rs 37,923 crore from Rs 37,441 crore in the same quarter a year ago. The company expects a revenue growth of 1-3 per cent in constant currency for FY25 and an operating margin of 20-22 per cent.

Infosys MD and CEO Salil Parekh said that there is no change in the discretionary spending on digital transformation work as the company transitioned to FY25. "Growth guidance for next year is higher than where we finished for this year. The difference is small. As we go into the industries, we see financial services to see a better outlook in the next year compared to the past year," Parekh said.

"Manufacturing will have slower growth this year. Given the outlook with discretionary spend, digital work remaining the same, more focus on cost efficiency and consolidation, we have created that revenue growth guidance," he said.

The growth projection is lower compared to the outlook of between 4 per cent and 7 per cent for FY24. Infosys posted an operating margin of 20.1 per cent during the reported quarter and 20.7 per cent in FY24. During the fiscal ended March 2024, net profit increased 8.9 per cent to Rs 26,233 crore from Rs 24,095 crore recorded in FY23.

The annual income from operations increased 4.7 cent to Rs 1,53,670 crore in FY24 from Rs 1,46,767 crore a year ago. The company's employee headcount fell 7.5 per cent to 3,17,240 at the end of FY24 from 3,43,234 in FY23.

"When we started, we were at 77 per cent utilisation including the trainees. The growth environment was different at that time. Our utilisation has gone up to 82-83 per cent. Our attrition has also come down significantly. That is the reason for net headcount reduction," Infosys CFO Jayesh Sanghrajka said.

The company registered an attrition of 12.6 per cent. "Hiring model has changed in last few years. We are now on more agile model of campus hiring. At this point of time we are at 82 per cent utilisation. We still have headroom over that and attrition is very low so we have not decided on campus hiring numbers at this point of time," Sanghrajka said.

The total contract value of Infosys' large deals in FY24 was the highest ever at USD 17.7 billion, with 52 per cent being net new. "We delivered the highest-ever large deal value in 2023-2024. This reflects the strong trust clients have in us. Our capabilities in Generative AI continue to expand. We are working on client programmes, leveraging large language models with impact across software engineering, process optimisation, and customer support," Parekh said.

He said the large deals won during the FY24 will help the company in FY25. The Infosys board recommended a final dividend of Rs 20 per equity share for FY24 and a special dividend of Rs 8 per equity share. The board reviewed and approved the capital allocation policy for the next five years from FY25-FY29 after taking into consideration the strategic and operational cash requirements.

"Free cash flow of USD 848 million in the fourth quarter was highest in the last 11 quarters driven by our relentless focus to improve working capital cycle. Consistent with the objective of giving high and predictable returns to shareholders, the board has approved the capital allocation policy under which the company expects to return 85 per cent over the next five years and progressively increase annual dividend per share," Sanghrajka said.

The company also announced that it will acquire a 100 per cent stake in German firm in-tech in an all cash deal for 450 million euros, or about Rs 4,000 crore.