Infosys (INFY) is a global leader in next-generation digital services and consulting. Over 300,000 people of the company work to amplify human potential and create the next opportunity for people, businesses and communities. The company enables clients in more than 56 countries to navigate their digital transformation. With over four decades of experience in managing the systems and workings of global enterprises, it expertly steers clients, as they navigate their digital transformation powered by the cloud. The company enables them with an AI-powered core, empower the business with agile digital at scale and drive continuous improvement with always-on learning through the transfer of digital skills, expertise, and ideas from our innovation ecosystem.

Result Analysis:  Infosys Limited (CMP: Rs.1448.85) Result Update: Q1FY24

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    Stock Details
    Market Cap. (Cr.) 601300.63
    Equity (Cr.) 2075.10
    Face Value 5
    52 Wk. high/low 1672 / 1215
    BSE Code 500209
    NSE Code INFY
    Book Value (Rs) 155.26
    Sector IT – Software
    Key Ratios
    Debt-equity: 0.10
    ROCE (%): 44.36
    ROE (%): 36.42
    EPS TTM: 59.47
    P/BV: 9.33
    P/E TTM: 24.36

    Result Highlights:

    • The company reported a marginal increase in revenue of 1.3% QoQ to Rs.37,933cr. and a de-growth of 3.1% QoQ in net profit to Rs.5,945 cr. The primary factors contributing to this performance was pain from discretionary spend cuts and delayed ramp-up continues.

    • EBIT Margin of the company declined by 20 bps QoQ in the quarter and stands at 20.8%, led by increase in Selling and Marketing Expenses (up 7.5% QoQ) during the quarter.

    • Among segments the YoY growth was led by Manufacturing (up 21.3% YoY in cc terms) and Life Sciences (up 14.9% YoY in cc terms), and E&U (+8.6% YoY).

    • Across geographies, Europe grew 10.1% YoY, North America grew 2.1% YoY, India grew 13.7% YoY and RoW declined by 0.5% YoY.

    • With a net new of 56.1%, the large deal TCV for the quarter was $2.3 billion. There were 1,883 active clients (up from 1,872 in Q4FY23).

    • One $2 billion mega contract was struck after Q1 of FY24, and its execution would scale up by the end of the year.

    • Utilization (ex-trainees) increased by 110bp QoQ while net employee numbers decreased by 6.9k QoQ. In 1QFY24, attrition (LTM) decreased by 360bp QoQ to 17.3%.

    • The company claimed that customers are responding well to its generative AI goods and services. Under this area, 80 projects are currently under development. These initiatives include language, text, voice, and video-related services.

    Financial Performance:

    Infoyos-Financial- Performance-elite-wealth

    Shareholding Pattern:

    Particulars (In %) Q1FY23 Q4FY23
    Promoters Group 13.11 13.30
    FIIs 32.70 31.75
    DIIs 18.87 29.72
    Public 34.29 24.37
    Others 1.03 0.86

    Management Commentary:

    Commenting on the June quarter results, Salil Parekh, CEO and MD said, “We had a solid Q1 with a growth of 4.2% and large deals of $2.3 billion which helps us to set a strong foundation for future growth. Our generative AI capabilities are expanding well, with 80 active client projects. Topaz, our comprehensive AI offering, is resonating well with clients. We see this being transformative for clients and enhancing our overall service portfolio. We have expanded the margin improvement program with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by our leadership team.”



    Infosys (INFO) posted muted Q1FY24 results, which were primarily driven by a slowdown in discretionary spending and a ramp-down in project activity. Infosys has also reduced its revenue projection for FY24E from 4-7% to 1-3.5% due to delays in decision-making and the conversion of large projects. OPM outlook retained at 20-22%. The multiyear tech adoption cycle is still largely intact, with cloud and data analytics adoption driving it. Although there has been a slowdown in discretionary tech expenditure in industries like hi-tech, retail, telecom, etc. The total IT industry will continue to be impacted by macro issues related to the financial crisis, and this reduced growth rate will result in low-to-mid single digit revenue growth during FY24/25E.



    Particulars (In Rs. Cr.) Q1FY24 Q4FY23 Q1FY23 QoQ%      YoY%
    Revenue from Operations 37,933 37,441 34,470 1.3% 10.0%
    Other Income 561 671 676 -16.4% -17.0%
    Total Income 38,494 38,112 35,146 1.0% 9.5%
    Employee Benefit Expenses 20,781 20,311 18,337 2.3% 13.3%
    Employee benefit Expenses as % of Sales 54.8% 54.2% 53.2% 60 bps 160 bps
    Cost of technical sub-contractors 3,124 3,116 3,909 0.3% -20.1%
    Cost of software packages and others 2,720 2,886 2,420 -5.8% 12.4%
    Depreciation & Amortisation Expense 1,173 1,121 950 4.6% 23.5%
    Other Expenses 2,244 2,130 1,940 28.7% 51.2%
    EBIT 7,891 7,877 6,914 -4.5% 7.1%
    EBIT Margin 20.8% 21.0% 20.1% -20 bps 70 bps
    Profit After Tax (PAT) 5,945 6,134 5,362 -3.1% 10.9%
    PATM (%) 15.7% 16.4% 15.6% -70 bps 10 bps
    EPS (in Rs.) 14.37 14.79 12.78 -2.8% 12.4%
    Segment Revenue (In Rs. Cr.) Q1FY22 Revenue % Q4FY23 QoQ% Q1FY23 YoY%
    Financial Services 10,661 28.1% 10,818 -1.45% 10,562 0.94%
    Retail 5,513 14.5% 5,537 -0.43% 5,004 10.17%
    Communication 4,441 11.7% 4,411 0.68% 4,464 -0.52%
    Energy, Utilities, Resources, and Services 4,889 12.9% 4,825 1.33% 4,259 14.79%
    Manufacturing 5,350 14.1% 5,078 5.36% 4,172 28.24%
    Hi-Tech 3,056 8.1% 2,989 2.24% 2,812 8.68%
    Life Sciences 2,749 7.2% 2,681 2.54% 2,257 21.80%
    All other segments 1,274 3.4% 1,102 15.61% 940 35.53%
    Total 37,933 100.0% 37,441 1.31% 34,470 10.05%

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