Tech giant Infosys has made a significant start to the fiscal year, with its first-quarter numbers beating the Street’s estimates.
It has also raised its guidance for the year.
For the quarter ended June 30, 2019, net profit was ₹3,802 crore while revenues increased to ₹21,803 crore, a growth of 14% year-on-year and 1.2% quarter-on-year. Operating margin was 20.5%. Infosys also reported higher-ever large deal wins with total total contract value of at $ 2.7 billion.
“We had a strong start to FY 20 with constant currency growth accelerating to 12.4% on year over year basis and digital revenue growth of 41.9%. This was achieved through our consistent client focus and investments which have strengthened our client relationships”, said Salil Parekh, CEO and MD. “Consequently, we are raising our revenue guidance for the year from 7.5%-9.5% to 8.5%-10%.”
Here are the highlights from Infosys Q1 results:
Revenues grew year-on-year by 10.6% in USD; 12.4% in constant currency
Revenues grew sequentially by 2.3% in USD; 2.8% in constant currency
Digital revenues at $1,119 million (35.7% of total revenues), year-on-year growth of 41.9% and sequential growth of 8.6% in constant currency
Increased FY20 revenue growth guidance range to 8.5%-10% in constant currency
Maintained FY20 operating margin guidance range of 21%-23%
Its attrition increased to 23.4%, as compared to 23% year-on-year
Commenting on the record deal win, COO Pravin Rao said: “We had a good quarter as we continue to leverage our digital navigation framework to help our clients build and nurture their live enterprise. Segment growth was robust with all large regions and most verticals growing at double digits year-on-year in constant currency”
Infosys has revised its capital allocation policy upwards to distribute about 85% of free cash flows cumulatively over a 5-year period, from 70% higher.
“Effective from Financial year 2020, the company expects to return approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi-annual dividends and/or share buyback and/or special dividends, subject to applicable laws and requisite approvals, if any,” Infosys said in a statement.