Infosys Q2 earnings: Net profit rises 6% annually to ₹7,823 crore; cuts revenue growth guidance

Infosys, the country's second largest information technology (IT) services company on Friday, October 23, reported a consolidated net profit of ₹7,823 crore in the second quarter of current financial year, marking an increase of 6% from ₹7,364 crore a year earlier. On a sequential basis, its net profit rose 0.7% from ₹7,769 crore.

The Bengaluru-based company's revenue from operations during the quarter rose 11% annually to ₹49,244 crore and on sequential basis revenue rose 2.14% from ₹48,211 crore.

In dollar terms, Infosys' revenue rose 1.5% sequentially to $5,145 million and in constant currency terms, the company registered revenue growth of 1.2%.

Infosys in an earnings release said that its revenue from artificial intelligence (AI) came in at 10.5% of the total revenue and rose 29% quarter-on-quarter.

Operating margin was stable at 21.0%. EPS growth was 8.7% year on year in rupee terms. TCV of large deal wins was $5.2 billion, with 62% net new, Infosys said.

“We had strong large deals of $5.2 billion, including a mega deal of over $2 billion, reinforcing our position as a trusted partner in the marketplace when clients embark on large and complex transformation programs. Our AI revenue was at 10.5% and grew 29% quarter-on-quarter. As enterprises move to AI adoption at scale, the strong growth in AI revenues is a recognition of our differentiated market positioning and client confidence,” said Salil Parekh, CEO and MD.

"We are advising some of the largest global enterprise on their AI strategy and continue to invest in deep domain and technology capabilities to bring new ideas and an integrated ecosystem to help businesses unlock AI value at scale,” he added.

The company cut its revenue growth guidance for the current financial year to 1%-2% from its earlier guidance of 1.5%-3% but maintained operating margin guidance of 20%-22%.

“We delivered operating margins of 21.0% in Q2 amidst heightened volatility. Focus on cost and operational efficiency measures while making the required investments, have led to stable margins,” said Jayesh Sanghrajka, CFO.

Q2 key deal wins

• Infosys collaborated with Mondelez International to drive its supply chain transformation through AI-enabled decision-making, data standardization, and intelligent enterprise workflows.
• Infosys entered a ten-year strategic agreement with Crocs, Inc. to accelerate its IT transformation and support scalable global growth.
• Infosys collaborated with Knorr-Bremse to accelerate its AI-enabled enterprise transformation.
• Infosys expanded collaboration with Metsä Group to drive AI-led transformation of its IT landscape.
• Infosys collaborated with NTN Corporation to drive its digital growth with seamless SAP cloud adoption.
• Infosys Finacle was selected by Investec to drive its digital banking transformation through the Finacle SaaS platform on Microsoft Azure

Infosys shares ended 0.04% higher at ₹1,153.80 ahead of its earnings announcement.