Infosys reported a 14.4 percent sequential growth in consolidated profit at Rs 4,845 crore for the September quarter and revised its full-year revenue as well as margin guidance given the highest-ever deal wins in Q2.
Consolidated revenue from operations increased to Rs 24,570 crore in Q2 FY21, up by 3.8 percent QoQ, while dollar revenue grew by 6.1 percent sequentially to $3,312 million for the September quarter, with constant currency revenue growth of 4 percent.
Here are the highlights of Infosys’ Q2 FY21 earnings call as compiled by Narnolia Financial Advisors:
Management Participants: Salil Parekh- CEO, Pravin Rao- COO and Niranjan Roy- CFO
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According to the management of Infosys, TCV was at USD 3.15 billion. Six deals win in financial services, 3 deals in retail, 2 deals each in communication and Hi-tech and remaining all including others 1 deal.
The management paid variable pay of 100 percent during the quarter and will pay one-time incentive for junior level employees in Q3. The salary increase process will restart now and will be effective from January 1, 2021. Promotion of junior level started from Q2 and will be extended across all levels in Q3, the company said.
In Q2, management took another step of local hiring in US, over the last 3 years hired over 13,000 US workers. Over the next two years management is planning to hire another 12,000 US workers, bring a hiring commitment of hiring 25,000 US workers. Management launched Infosys cobalt where it brought together all Cloud services, platform and solutions to support client and accelerating their Cloud journey and reducing their risk to Cloud platform.
Cobalt has 200 industry template and 14,000 Cloud components available to client for their Cloud first program. Cobalt has built strong partnership with leading SAP, SAAS and infra as a service across public, private and Hybrid Cloud environment.
In Q2, Infosys announced 3 acquisitions: Guide vision: focus of service now, Blue Acorn focused on Adobe and kaleidoscope focused on medical product design. Q2 performance is a combination of serving continuous focus on the needs of client, steady execution and a clear strategy to build digital and Cloud aligned company, the management added.
Utilization improved by 240 Bps to 83.6 percent mainly on account of improvement in offshore utilization. Onshore effort mix improved by 190 Bps to 26.1 percent, the lowest ever. Client matrix remains strong and Infosys has added 96 clients in Q2, it said.
Outlook
Management sees strong traction in business going ahead and revised its revenue growth guidance to 2-3 percent in CC terms in FY21 (against 0-2 percent growth expected in Q1FY21). Management increases its operating margin guidance for FY21 to 23-24 percent (against 21-23 percent in Q1). Vanguard deal will start ramping up from Q3; marginal contribution in top line was seen in Q2, it said.
