Infosys Q3 PAT increases by 9% QoQ to Rs 6,586 crore; attrition rate cools down

Infosys reported 9.4% rise in consolidated net profit to Rs 6,586 crore on a 4.9% increase in revenues to Rs 38,318 crore in Q3 FY23 over Q2 FY23.

The company's net profit and revenues are higher by 13.4% and 20.2% as compared with Q3 FY22.

Operating profit in the third quarter was Rs 8,242 crore, up 4.7% QoQ and up 10.1% YoY. Operating profit margin was 21.5% for Q3 FY23, down 2% YoY.

In dollar terms, the company reported revenues of $4,659 million (up 2.3% QoQ and up 9.6% YoY) for the quarter ended 31 December 2022.

In constant currency terms, the company's revenue has grown by 2.4% QoQ and by 13.7% YoY during the period under review.

Infosys said that year-on-year (YoY) growth was in double digits for most business segments and geographical regions in constant currency terms. Digital comprised 62.9% of overall revenues and grew at 21.7% in constant currency.

Large deal TCV for the quarter was the strongest in the last 8 quarters at $3.3 billion.

The IT major has received its FY23 revenue guidance to 16.0%-16.5% from 15%-16% stated at the end of Q2 FY23. The operating margin guidance has been retained at 21%-22%.

Free cash flow (FCF) as on 31 December 2022 was Rs 4,741 crore, a decline of 12.2% YoY. FCF conversion was at 72% of net profit.

The company had 1,850 active clients as of 31 December 2022 as compared with 1,779 active clients as of 30 September 2022 and 1,738 as on 31 December 2021.

Total headcount as on 31 December 2022 was 3,46,845. Last twelve months IT services attrition rate stood at 24.3% as of 31 December 2022 as compared with 27.1% as of 30 September 2022 and 25.5% as on 31 December 2021.

Salil Parekh, CEO and MD, said: "Our revenue growth was strong in the quarter, with both digital business and core services growing. This is a clear reflection of our deep client relevance, industry-leading digital, cloud, and automation capabilities, and the unrelenting dedication of our employees.

As reflected in the large deals momentum, we continue to gain market share as a trusted transformation and operational partner for our clients. Our end-to-end capabilities and global scale make us a preferred choice as clients look at consolidating vendors. We remain focused on helping businesses accelerate their digital agenda to uncover new value and growth, as well as improve operational and cost effectiveness."

Nilanjan Roy, Chief Financial Officer, commented: "Operating margins in Q3 remained resilient due to cost optimization benefits which offset the impact of seasonal weakness in operating parameters. Attrition reduced meaningfully during the quarter and is expected to decline further in the near-term."

Infosys is a global leader in next-generation digital services and consulting.

The scrip rose 0.62% to currently trade at Rs 1480.55 on the BSE.

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