Infosys Q1 profit surges 7% to ₹6,368 cr; revenue up 3.6%

IT services major and India's second biggest IT company Infosys Ltd reported a 7.1% year-on-year rise in its net profit at ₹6,368 crore as compared to ₹5,945 crore in the corresponding quarter last year, beating the Street expectations. The company's revenue surged 3.6% year-on-year to ₹39,315 crore compared to ₹37,933 crore in the year-ago period, an exchange filing shows.

Operating margin was recorded at 21.1% in the said quarter, a growth of 0.3% YoY and 1.0% QoQ. Infosys says its free cash flow was the highest ever at $1,094 million in Q1 FY25, an increase of 56.5% YoY. The number of large deal wins was also the "highest ever" at 34, with a total commercial value of $4.1 billion, 57.6% being net new.

“We had an excellent start to FY25 with strong and broad-based growth, operating margin expansion, robust large deals, and highest ever cash generation. This is a testimony to our differentiated service offerings, enormous client trust, and relentless execution”, said Salil Parekh, CEO and MD. “With our focused approach for generative AI for enterprises working with their data sets on a cloud foundation, we have strong traction with our clients. This is building on our Topaz and Cobalt capabilities” he added. 

The basic earning per share was recorded at ₹15.38, an increase of 7.0% YoY. As of June 30, 2024, Infosys' total employees account stood at 3,15,332, up from 3,17,240 in Q4 FY24 but down from 3,36,294 in Q1 FY24. Voluntary attrition was recorded at 12.7% in the said quarter, slightly up from 12.6% in Q4 FY24 and down from 17.3% in Q1 FY24. The women employees at the company stood at 39.2% in Q1 FY25, 39.3% in Q4 FY24 and 39.5% in Q1 FY24.

“Our relentless drive on cost optimization through Project Maximus, a comprehensive margin expansion program, is reflected in the all-around improvement in key operating metrices leading to 1.0% growth in operating margin in Q1”, said Jayesh Sanghrajka, CFO. “We had the highest ever FCF generation at $1.1 bn and ROE increased to 33.6% due to higher payouts to investors”, he added. 

For FY25, Infosys has given a revenue growth guidance of 3-4% in constant currency, with an operating margin of 20%-22%. Shares of Infosys closed at ₹1,759.15, up 1.93%, on the BSE today. Infosys share has surged 13.71% in the calendar year, while it recorded a 19.58% rise in the past year.

Infosys rival and India's largest IT services company Tata Consultancy Services (TCS), which released its Q4 numbers on July 11, posted 8.7% year-on-year (YoY) growth in its net profit at ₹12,040 crore. Its board declared an interim dividend of ₹10 per equity share of ₹1 each. The company's revenue rose 5.4% YoY to ₹62,613 crore.

Systematix Institutional Equities, in its IT sector report this month, had said that Infosys may see “1.8% QoQ revenue growth on execution pick up arising from strong deals signed in the last few quarters by the company”.