Infosys raises revenue guidance as Q3 profit jumps 13% to ₹6,586 cr

Net profit of software services giant Infosys rose 13.4% year-on-year to ₹6,586 crore during the quarter ended December 31, 2022, beating analyst estimates.

The Bengaluru-based IT giant reported a 20% year-on-year jump in its revenue to ₹38,318 crore during the third quarter compared with ₹31,867 crore in the corresponding period a year ago.

The company revised its revenue guidance for FY23 to 16%-16.5% from 15-16% earlier.

Operating margin for the quarter stood at 21.5% compared with 23.5% in the year-ago period. Infosys retained its FY23 operating margin guidance at 21%-22%.

Infosys won deals worth $3.3 billion in Q3, the strongest in the last eight quarters. Digital comprised 62.9% of overall revenues and grew at 21.7% in constant currency terms.

"Our revenue growth was strong in the quarter, with both digital business and core services growing. This is a clear reflection of our deep client relevance, industry-leading digital, cloud, and automation capabilities, and the unrelenting dedication of our employees," says Salil Parekh, CEO and MD, Infosys.

"As reflected in the large deals momentum, we continue to gain market share as a trusted transformation and operational partner for our clients. Our end-to-end capabilities and global scale make us a preferred choice as clients look at consolidating vendors. We remain focused on helping businesses accelerate their digital agenda to uncover new value and growth, as well as improve operational and cost effectiveness," he adds.

The IT company started its share buyback programme through open market route from December 7, 2022, and to date, it has bought back 31.3 million shares worth ₹4,790 crore or 51.5% of total authorisation of ₹9,300 crore at an average price of around ₹1,531 per share.

"Operating margins in Q3 remained resilient due to cost optimization benefits which offset the impact of seasonal weakness in operating parameters," says Nilanjan Roy, chief financial officer, Infosys. "Attrition reduced meaningfully during the quarter and is expected to decline further in the near-term," he adds.

As per the regulatory filing, the attrition rate of Infosys stood at 24.3% in the third quarter compared with 27.1% in the quarter ended September. On a year-on-year basis, the attrition rate has declined by 1.2%.

Infosys also announced the appointment of Govind Iyer as an independent director of the company, effective January 12, 2023. This appointment is based on recommendation of the Nomination and Remuneration Committee of the Infosys Board, and is for a period of five years, subject to the approval of shareholders.

Iyer retired as a partner at global leadership advisory firm Egon Zehnder. Prior to joining Egon Zehnder, Govind worked at Procter & Gamble, Coca-Cola, and Heinz. He has a Bachelor of Engineering degree from Regional Engineering College, Trichy, and an MBA from The Wharton School, University of Pennsylvania.