BENGALURU: A boost in digital revenues, cutting down discretionary spends, and clinching large deals helped IT services provider Infosys best peers such as Tata Consultancy Services and Wipro in the second quarter of the financial year (Q2FY21). The company’s net profit soared 20.5 per cent year-on-year to Rs 4,845 crore compared to Rs 4,019 crore a year ago.
Infosys has also hiked its revenue guidance for FY21 to 2-3 per cent in constant currency terms from an earlier prediction of just 0-2 per cent. The company has also revised its margin outlook upwards to 23-24 per cent.
Infosys chief executive Salil Parekh, while describing its Q2 performance as above industry average, pointed out that the company’s decision to hike wages, start promotion cycles may result in headwinds in Q3FY21 impacting margins.
The wage hikes, promotions for over 2 lakh employees will be effective from January, 1, 2021. Based on increased intervention on the employees engagement front, the voluntary attrition has dropped to 7.8 per cent from 18.3 per cent a year ago, he said. Infosys recruited for 5,500 roles in Q2 comprising 3,000 freshers nad 2,500 lateral hires.
“Our second quarter performance is a clear reflection of our ability to help clients on their digital,transformation journeys. Our digital and cloud capabilities combined with intense client relevance are helping us achieve differentiated results in the market as is visible in 2.2 per cent year on year overall revenue growth and 25.4 per cent growth from digital offerings, which now are at 47.3 per cent of revenues,” Parekh added.
Digital services now account for 47.3 per cent of the company revenues at Rs 3,312 crore compared to Rs 3,210 crore a year ago. Going forward, Parekh said that the digital services may constitute 50 per cent of the total revenues due to rapid digital transformation.
Rs 4,845 crore was the company’s net profit in Q2
2-3 per cent new forecast on FY21 sales growth
23-24 per cent revised outlook for the company’s margin during the fiscal