Salil Parekh, CEO and MD Infosys, speaking at Infosys Q1 results announce press conference at Infosys Limited Electronics City, in Bengaluru on Thursday, 18 July 2024.
Credit: DH Photo/S K Dinesh
Bengaluru: IT major Infosys posted a 7.1 per cent year-on-year rise in consolidated net profit and a 3.6 per cent bump in revenue in the Q1FY25 (April-June 2024 quarter), comfortably beating analyst estimates, on the back of bagging some large deals.
Additionally, just a day after the furore over the Karnataka government’s plans to have quotas for local professionals, Infosys, which is one of the largest tech employers in the state, said it will work within regulations.
"We are planning to work with all the regulations of the state and central governments. We'll wait and see what they look like as time develops, but our approach in general is to make sure we are aligned to the new laws and regulations that come out," Salil Parekh, Chief Executive Officer and Managing Director, said at a media briefing post-results
As per the earnings numbers released on Thursday, for FY25, the Bengaluru-headquartered tech giant raised its revenue growth outlook to 3-4 per cent from 1-3 per cent, unlike its peers -TCS and HCLTech - who kept their guidance unchanged.
For Q1, consolidated net profit saw a decline sequentially, but jumped compared with the same period last year, to Rs 6,368 crore.
“We had an excellent start to FY25 with strong and broad-based growth, operating margin expansion, robust large deals, and highest ever cash generation," said Salil Parekh, Chief Executive Officer and Managing Director. Infosys bagged 34 large deal wins in the quarter, with a total contract value of $4.1 billion.
However, the company’s net headcount declined by 1,908 on a sequential basis. The company said it plans to hire professionals both on-campus and off-campus. The attrition rate stood at 12.7 per cent, a 4.6 per cent decline compared to the same period last year.
"We have only a little room to improve utilisation, which is already at 85 per cent. However, we are looking to hire 15,000 - 20,000 freshers this year depending on how we see the growth," said Infosys Chief Financial Officer Jayesh Sanghrajka.
Infosys saw signs of growth from its banking, financial services and insurance (BFSI) clients, especially in North America. In contrast, retail, communication, hi-tech, energy, utilities, resources and services vertical saw a decline in revenue.
Geographically, the company’s India market saw a healthy growth of 18.4 per cent, while North America showed a decline of 1.2 per cent on a year-on-year basis. On the other hand, Europe reported an annual growth of 8.6 per cent.
The top brass of the second-largest IT company also highlighted that discretionary spending remained under pressure and is lower than where it was several quarters ago.
“Despite economic challenges and discretionary client spending, Infosys maintains a positive outlook with a strong deal pipeline. IT service buyers will be cautious with spending and focus on strong business outcomes,” said Biswajit Maity, Senior Principal Analyst at Gartner.