BENGALURU: The country’s second-largest IT services firm Infosys on Wednesday posted a 12% Y-o-Y rise in its Q4 net profit at Rs 5,686 crore, from Rs 5,076 crore in a year-ago period. The company’s revenue for the March quarter increased 22.7% to Rs 32,276 crore from Rs 26,311 crore in the same quarter last year. For FY22, it recorded the fastest growth in a decade with revenues of Rs 1,21,641 crore, an increase of 21.1% compared to the previous year.
Its revenue was Rs 1,00,472 in FY21. Differentiated cloud services and large deal momentum drove the IT firm’s highest annual growth.
Analysts and brokerage firms had predicted that the Bengaluru-based IT major might report double-digit growth. They also expected the IT firm to retain its margin guidance in the 22-24% band. Infosys projected revenue growth guidance of 13-15% and operating margin guidance of 21-23% for FY23.
“We continue to gain market share as a result of sustained clients’ confidence in our ability to successfully navigate their digital journeys,” said Salil Parekh, CEO and MD of Infosys. He also added that they will scale talent globally, invest in employees and accelerate innovation and digital capabilities to capitalise on the expanding market opportunity.
The company’s operating margin for the fourth quarter stood at 21.5%, a decline of 3% Y-o-Y, and for FY22 it was 23%, a decline of 1.5% Y-o-Y. Its digital revenues stood at 57% of total revenues for the year ended March 31, 2022.
“With a robust demand environment ahead, we envisage making appropriate long-term investments in capability building across sales, delivery, and innovation. However, we plan to neutralize some of the impacts through aggressive cost optimisation programs and value-led pricing driven by service and brand differentiation,” said Nilanjan Roy, CFO, Infosys.
The firm said it won $2.3 bn in total contract value (TCV) for the fourth quarter, and $9.5 bn in FY22. The Board has approved a final dividend of Rs 16 per share, taking the total dividend for FY22 to Rs 31 per share, an increase of 14.8% over prior year.
Attrition spikes to 27.7%
Attrition continues to be a cause for concern for Infosys, as it reported 27.7% attrition in the fourth quarter compared to 25.5% reported in the December quarter.
The IT major also hired 85,000 freshers in FY22 and is looking to hire over 50,000 freshers in FY23.
It expects the attrition to come down further in the coming quarters, saying it has taken various initiatives on employee engagement.
Nilanjan Roy said at the press conference, “We said in the last quarter that attrition had stabilised. The tail effect on an annual basis will continue to climb but there is stability and interventions and with the April 1 hike planned, we should continue to see some improvement in that."
Salil Parekh said that they have seen a small decline in attrition from the previous quarter and that would continue to see stabilisation in the quarters ahead.