Infosys Q2 US dollar revenue up 2.2%; cuts upper end of guidance for FY24

• IT major reports 2.3% sequential growth in its constant currency revenues.
• Company’s net profit has grown by 4.5% sequentially to ₹6,212 crore.
• Infosys reports highest large orders’ total contract value at $7.7 billion.

IT major Infosys reported a 2.3% sequential growth in its constant currency revenues for the second quarter on Thursday. While it did beat street expectations of around 1% growth, the Bengaluru-based tech major also slashed the upper end of its constant currency revenue guidance for FY24. The company has also announced wage hikes which will be rolled out from November 1, 2023.

The company’s dollar revenues sequentially grew 2.2% to $4,718 million in Q2 as compared to $4,617 million in Q1.

It had earlier guided that its constant currency (CC) revenues for FY24 will grow at 1-3.5%. Half way through the fiscal year, it believes that it can grow anywhere between 1-2.5%. It has however retained its operating margin guidance 20-22% for the year.

The net profit grew by 4.5% sequentially to ₹6,212 crore in Q2 from ₹5,945 crore in the last quarter. Its operating margin for the quarter increased by 40 basis points sequentially to 21.2%.

“Our Q2 operating margin of 21.2% demonstrates the early benefits of the recently unveiled margin improvement plan and is a clear reflection of our ability to continuously identify opportunities for improving operational efficiencies,” said Nilanjan Roy, CFO.




Comment on earnings by Prashanth Tapse of Mehta Equities said, “Infosys Q2 earnings are in line with markets expectation but the company trimming its revenue guidance would be negative for the stock. Overall results are not so bad but discounted in prices. FY24 guidance - revised downwards would put pressure on prices to sustain while it has maintained margins."

He added that technically the last minute fall in prices shows that results were not in favour of bulls and hence a gap down opening between ₹1,400-1,420 could be seen in the opening trade.

Large deal wins

The company is also sitting on a robust orderbook of large deals. Its large orders’ total contract value (TCV) of large deals at $7.7 billion.

“We had our highest large deals value at $7.7 billion in Q2 spread across all verticals and geographies. This, in an uncertain macro-environment, is a testament to our ability to pivot and stay relevant to the evolving client needs, by delivering the benefits of transformation as well as productivity and cost savings at scale”, said Salil Parekh, CEO and MD.

Like its peer TCS, Infosys also reported a drop in attrition to 14.6%.

“Strong H1 performance with significant large deal wins, builds a solid foundation for the future. The growing adoption of our Generative AI offering, Topaz, is helping us deliver consistent value and expand market share”, Parekh added.