Moshe Katri, MD of Wedbush Securities, on Thursday, said that Infosys' Q1 performance is symbolic of the multi-year IT upcycle.
IT major Infosys, on Wednesday, reported a consolidated net profit of Rs 5,195 crore in the first quarter of 2022 fiscal, registering a growth of 2.34 per cent as compared to Rs 5,076 crore in the previous quarter.
Speaking in an interview with CNBC-TV18, Katri said, “Infosys delivered the best constant currency revenue in about 10 years. It’s a bit more symbolic of the fact that we are headed towards a multi-year cycle with an accelerating topline growth for the industry.”
However, said Katri, Infosys margin declined due to higher sub-contracting cost and retention programmes.
According to him, IT companies are going back to the historical practice of hiring from colleges. “The industry is going back to its traditional practices of college recruiting, which is something we haven’t seen for some time given the fact that the demand in the industry was unpredictable, there was more reliance on lateral hires, sub-contractors. Therefore, there are multiple reasons for the margin miss for the quarter,” said Katri.
He further said that Infosys and Tata Consultancy Services (TCS) are doing well to expand their non-legacy, digital business.
For the entire interview, watch the video.