IT major Infosys on Wednesday reported a consolidated net profit of Rs 5,195 crore in the first quarter of fiscal 2022, registering a growth of 2.34 per cent as compared to Rs 5,076 crore in the previous quarter.
Net profit was lower than CNBC-TV18 analysts' poll estimates of Rs 5,402 crore.
The company's revenue in rupee terms increased 6 percent to Rs 27,896 crore from Rs 26,311 crore, QoQ. The revenue beat CNBC-TV18 analysts' poll expectations of 27,718 crore.
The topline in dollar terms grew by 4.7 percent sequentially to $3,782 million, beating estimates $3,758 million for the quarter.
The revenue growth in constant currency was at 4.8 percent on a sequential basis.
The digital business witnessed a growth of 9.7 percent sequentially to $2,040 million, but the core business declined 0.7 percent QoQ at $1,742 million for the June 2021 quarter.
The total contribution of digital business to revenue has been increasing to 53.9 percent as of June 2021, from 51.5 percent in March 2021.
The large deal flows remained strong with total contract value of $2.6 billion in Q1, said the company in an exchange filing.
Infosys increased its FY22 revenue growth guidance to 14-16 percent from 12-14 percent earlier, while retained full year EBIT margin guidance at 22-24 percent.
"We grew at the fastest pace in Q1 in a decade, at 16.9% year-on-year and 4.8% quarter-on-quarter in constant currency. This gives us confidence to increase our revenue growth guidance to 14%-16%," said Salil Parekh, CEO and MD, Infosys.
At the operating level, EBIT increased 2.5 percent to Rs 6,603 crore from Rs 6,440 crore, while EBIT margin declined by 80 bps to 23.7 percent from 24.5 percent, sequentially.
Infosys' operational performance missed estimates. EBIT was pegged at Rs 6,787 crore, while EBIT margin was estimated at 24.5 percent.
“We remain confident of delivering on the margin guidance, underpinned by our comprehensive cost optimization program, despite increasing cost headwinds arising largely from compensation review, talent acquisition and retention”, said Nilanjan Roy, Chief Financial Officer, Infosys.
“Our free cash conversion was strong at 122.3% of net profit and ROE improved to 29.3%”, he added.
The company's margins were impacted due to employee costs like retention. Infosys said it will increase fresher hiring and has already recruited over 10,000 freshers this quarter.
“As the demand for digital talent explodes, rising attrition in the industry poses a near-term challenge. We plan to meet this demand by expanding our hiring program of college graduates for FY 22 to 35,000 globally,” said Pravin Rao, Chief Operating Officer, Infosys.
On Wednesday, the shares of Infosys ended 2.07 percent higher at Rs 1,576.90 apiece on the BSE.
First Published: IST