Infosys Q3 net rises 13.4% to ₹6,586 crore

`We do see a change in global market environment, still oil, energy, manufacturing sectors will grow strong,’ says Salil Parekh

We won large deals worth $3.3 billion, the highest in eight quarters, as against $2.7 billion bagged last quarter, says Salil Parekh CEO & MD.

Technology and digital services firm Infosys posted a 13.4% rise in net profit to ₹6,586 crore in the third quarter ended December.

Revenue grew 20.2% year-on-year to ₹38,318 crore during the quarter aided by digital and core services.  

“Although, Q3 was a seasonally weak quarter, we were able to benefit from consolidation and earned market share, Salil Parekh CEO & MD, said. “We won large deals worth $3.3 billion, the highest in eight quarters, as against $2.7 billion bagged last quarter.’‘

However, he said, the tech firm was seeing different demand environments for different industries in global markets. For instance; energy, utility and manufacturing segments were extremely strong while financial services, hi-tech, retail, telcos, mortgage and investment banking were showing some constraints, especially in European markets.

“Also, there is more demand for projects around automation, cost-efficiency and operational optimisation. We do see a change in the environment, however, our two engines, cloud and digital, are driving growth for us,’‘ Mr. Parekh added in his commentary while addressing a media conference at the company premises on Thursday.

Infosys also revised upward its FY23 revenue guidance to 16.0%-16.5% from 15-16% earlier. “Our deal pipeline continues to be strong as we enter the fourth quarter,’‘ he added.

The firm said its attrition eased to 24.3% in Q3, from 27.1% in the previous quarter. “Our attrition saw a steady QoQ decline. Our policies, focused on employees, were working well. The overall market environment is also changing and therefore the attrition will further come down,’‘ Mr. Parekh anticipated.

In Q3, Infosys hired 1,627 employees, taking its total headcount to 3,46,845. It also onboarded 4,600 freshers in the quarter.

According to Nilanjan Roy, Chief Financial Officer, in Q3, the company’s operating margin remained steady at 21.5%. “As utilisation goes up, with freshers joining projects, we can bring down subcontractor costs. Also pricing discounts have come down substantially. So, we have many levers of improving margin,’‘ he said.

Operating margins in Q3 remained resilient due to cost optimisation benefits which offset the impact of seasonal weakness in operating parameters, Mr. Roy added.