Infosys managing director and chief executive officer Salil Parekh on Thursday said financial services discretionary spending is looking strong, especially cards and payments.
“In automotive, we still see slowness in Europe. In other verticals, retail, hi tech and telecom, we still see discretionary spend budget is constrained and the discussions with clients are on cost and efficiencies,” Parekh says at a press conference after the company announced its second-quarter results.
“Outside of financial services, we don’t see other industries yet starting to have a change in discretionary spend,” says Parekh.
Infosys witnessed de-growth in North America revenue on a year-on-year basis during the September quarter.
Parekh says large deals are on cost and efficiency and not so much on digital transformation. TCV of large deal wins was $2.4 billion, 41% being net new.
Infosys raised its revenue growth guidance from 3%-4% to 3.75%-4.50% in constant currency for the ongoing fiscal. “It’s a huge upward movement in the growth guidance,” says Parekh.
The software exporter says it is on track to onboard 15,000-20,000 freshers at a group level in FY25. Infosys recorded a net addition of 2,456 employees in Q2 FY25 after six consecutive quarters of headcount reduction.
“We had strong growth of 3.1% quarter-on-quarter in constant current in Q2. The growth was broad based with good momentum in financial services. This stems from our strength in industry expertise, market leading capabilities in cloud with Cobalt and generative AI with Topaz, resulting in growing client preference to partner with us” says Salil Parekh, CEO and MD, Infosys. “Our large deals at $2.4 billion in Q2 reflect our differentiated position. I am grateful to our employees for their unwavering commitment to our client as we further strengthen our market leadership” he adds.
The Bengaluru-based company's operating margin for the quarter stood at 21.1%, a decline of 0.1% year-on-year. Infosys gave an operating margin guidance of 20%-22% for FY25.
“We continue to focus on accelerating revenue growth with a sharp focus on margin performance. Operating margins for the quarter was at 21.1%, driven by continued benefits from value-based pricing and utilization despite higher employee payouts. Our focus on cash generation resulted in another quarter of over 100% Free Cash Flow conversion to net profits” says Jayesh Sanghrajka, chief financial officer of Infosys. “The Board announced an interim dividend of `21 per share, 16.7% increase from last year” he adds.
