India’s second-largest IT services firm Infosys reported a lower-than-estimated 3.2 per cent rise in June quarter net profit as operating margin declined on rising expenses.
Net profit is at Rs 5,360 crore, or Rs 12.78 a share, compared with Rs 5,195 crore, or Rs 12.24 per share, in the same period a year back, the company said in a statement.
Sequentially, the profit declined 5.7 per cent from Rs 5,686 crore in the January-March quarter.
Revenue or turnover rose 23.6 per cent to Rs 34,470 crore in April-June – the first quarter of the current fiscal year.
Infosys raised its full-year FY23 (April 2022 to March 2023) revenue guidance to 14-16 per cent against 13-15 per cent it had projected earlier, backed by Q1 growth, and a strong demand outlook.
Operating margin declined to 20.1 per cent in the first quarter of the current 2022-23 fiscal when compared with a 23.7 per cent margin in April-June 2021 and 21.5 per cent in January-March. Operating expenses rose 14.4 per cent, most as selling and marketing cost went up.
While revenue rose 6.8 per cent sequentially, EBIT at Rs 6,914 crore was lower than estimates.
The street was expecting a 5.5 per cent to 9.5 per cent year-on-year growth in its consolidated net profit. Sequentially, analysts had expected a drop in earnings but by less than a per cent.
“Our strong overall performance in Q1 amidst an uncertain economic environment is a testament to our innate resilience as an organisation, our industry-leading digital capabilities and continued client-relevance,” Salil Parekh, CEO and MD of Infosys said in a statement.
He added: “We are investing in rapid talent expansion while ensuring rewarding careers for our employees, to better serve evolving market opportunities. This has resulted in a strong performance in Q1 and increase in FY 23 revenue guidance to 14-16 per cent.
