Infosys Q3 results: Net profit jumps to ₹5,809 crore, IT firm raises revenue guidance

India's second-largest information technology firm, Infosys on Wednesday reported an 11.8% year-on-year rise in its consolidated net profit for the quarter ended December to ₹5,809 crore.

The software services company also clocked a 22.9% jump in consolidated revenues to ₹31,867 crore for the third quarter.

This, according to the company, was driven by broad-based growth and robust deal momentum, with digital transformation rapidly scaling across verticals and regions. Large deal wins accelerated with a total contract value of $2.53 billion in the third quarter, the IT firm said.

Operating margin for the quarter contracted 1.9% year-on-year to 23.5% due to supply-side challenges, the software major said.

“Despite the cost escalations driven primarily by supply side challenges, we delivered another quarter of healthy margins, with improved cost optimization, continued operating leverage and a stable pricing environment,” said Nilanjan Roy, chief financial officer at Infosys. “We continue to prioritize investments in talent acquisition and development and have further increased our global graduate hiring program to over 55,000 for FY22 to support our growth ambitions,” he said.

“Our talent strategy continued to be a key focus area marked by efforts to further strengthen employee skilling and well-being while nurturing our workforce to fulfil client requirements,” the IT major said.

Infosys raised its revenue growth estimate to 19.5-20% for the ongoing fiscal from 16.5-17.5% projected at the end of second quarter.

"Our strong performance and market share gains are a testament to the enormous confidence our clients have in us to help them in their digital transformation. This stems from four years of sustained strategic focus on areas of relevance for our clients in digital and cloud, continued re-skilling of our people, and deep relationships of trust that our clients have with us,” said Salil Parekh, chief executive officer and managing director of Infosys. “This is reflected in an upgrade in our revenue guidance to 19.5%-20.0% for FY22. We expect the healthy technology spend to continue with large enterprises progressing on their digital transformations.”

Digital revenues stood at 58.5% of the overall revenues, registering a 42.6% year-on-year growth in constant currency terms.

Infosys’ earnings before interest and taxes (EBIT) surged 13.6% year-on-year to ₹7,484 crore. Operating profit of the firm stood at ₹6,792 crore in the quarter ended September. Its free cash flow conversion stood at 92.6%.

Attrition rate at the end of December quarter stood at 25.5% compared with 20.1% in the second quarter.