Result Analysis: Infosys Ltd.(CMP: Rs.1388) Result Update: Q4FY23

Infosys Ltd. is the 2nd largest IT sector company being the global leader in consulting, technology, outsourcing and next-generation digital services, enabling clients to create and execute strategies for their digital transformation. It offers services to various sectors comprising BFSI, retail, energy & utilities and communication. Company services a large number of fortune 500 clients which have strong balance sheet. The major revenue generating regions for Infosys are North America and Europe.

    Open FREE* Demat & Trading Account & ₹0 AMC for first year


    Stock Details
    Market Cap. (Cr.) 592601.06
    Equity (Cr.) 2074.28
    Face Value 5
    52 Wk. high/low 1759 / 1356
    BSE Code 500209 
    NSE Code INFY
    Book Value (Rs) 158.95
    Sector IT – Software


    Key Ratios
    Debt-equity: 0.08
    ROCE (%): 39.66
    ROE (%): 32.34
    TTM EPS: 57.01
    P/BV: 8.74
    TTM P/E: 25.06

    Result Highlights:

    • Infosys reported results in the Q4 below street expectation with revenue of Rs.37,441 cr., decrease of 2.3% QoQ and net profits of Rs.6,134 cr., decrease of 6.9% QoQ.

    • EBIT of the company contracted by 50bps sequentially as well as 50 bps on yearly basis to 21%.

    • Among segments communication, BFSI, Hi-tech and Energy &Utilities segment decreased by 6.3%, 3.7%, 3.4% and 2.7% respectively in the quarter on QoQ basis while retail segment showed marginal growth of 1% QoQ.

    • Major markets i.e. North America revenue % declined by 100 bps while Europe grew by 120 bps on sequential basis.

    • Total Contract Value of Infosys is at $2.1 billion in Q4 Vs $3.3 billion in the previous quarter.

    • Attrition rate dropped to 20.9% vs 24.3% of previous quarter; total headcount of the company declined in the Q4 by 3,611 to 3,43,234.

    • Board of the company announced a final dividend of Rs.17.50/share for the last quarter.

    • In the concall, management highlighted the U.S. banking crisis impacted decisions across board and demand environment remains uncertain.

    • The company forecasted slower revenue growth for FY24, expects revenue growth of 4%-7% for the FY24. Operating margin is expected to be in the range of 20-22%


    Financial Performance:


    Shareholding Pattern:

    Particulars %
    Promoters & Group 13.18
    FIIs 32.59
    DIIs 28.56
    Public 24.77
    Others 0.90

    Management Commentary:

    • Commenting on the December quarter results, Salil Parekh, CEO and MD said, “Our strong performance in FY23 is a testimony to the continued focus on digital, cloud and automation capabilities which resonated with our clients. We have launched exciting programs with our clients leveraging generative AI platforms”
    • Nilanjan Roy, Chief Financial Officer said, Our continued focus on cost optimization and operational efficiencies have helped in achieving operating margins of 21.0% in FY23, “Free cash generation in Q4, led by robust collections, was strong. Executing on our capital allocation policy, we successfully completed the share buyback and have proposed a final dividend of `17.50 for FY23”


    Infosys reported below the broader estimates results in Q4FY23 majorly due to US banking crisis & unplanned project ramp downs across different sectors. Company has guided the revenue growth of mere 4%-7% for the FY24, which highlights the uncertainties ahead. The TCV pipeline of the company is large and remains strong. However, the uncertainties remains with the overall IT industry as the recession fears prevails for the US and Europe. Hence, we are positive on the Infosys only for a longer term perspective.


    Particulars (In Rs. Cr.) Q4FY23 Q3FY23 Q4FY22 QoQ% YoY% FY23 FY22 YoY%
    Revenue from Operations 37,441 38,318 32,276 -2.3% 16.0% 1,46,767 1,21,641 20.7%
    Other Income 671 769 637 -12.7% 5.3% 2,701 2,295 17.7%
    Total Income 38,112 39,087 32,913 -2.5% 15.8% 1,49,468 1,23,936 20.6%
    Employee Benefit Expenses 20,311 20,272 16,658 0.2% 21.9% 78,359 63,986 22.5%
    Employee benefit Expenses as % of Sales 54.2% 52.9% 51.6% 130 bps 260 bps 53.39% 52.60% 79 bps
    Cost of Technical sub-contractors 3,116 3,343 3,588 -6.8% -13.2% 1,881 1,163 61.7%
    Travel Expenses 426 360 309 18.3% 37.9% 1,525 827 84.4%
    Cost of software packages and others 2,886 3,085 2,268 -6.5% 27.2% 10,902 6,811 60.1%
    Communication Expenses 171 183 170 -6.6% 0.6% 713 611 16.7%
    Consultancy & Professional charges 387 401 521 -3.5% -25.7% 1,684 1,885 -10.7%
    Depreciation & Amortisation Expense 1,121 1,125 890 -0.4% 26.0% 5,022 4,604 9.1%
    Other Expense 1,146 1,307 916 -12.3% 25.1% 36,796 29,980 22.7%
    EBIT 7,877 8,242 6,956 -4.4% 13.2% 9,885 11,774 -16.0%
    EBIT Margin 21.0% 21.5% 21.6% -50 bps -50 bps 6.7% 9.7% -300 bps
    Profit After Tax (PAT) 6,134 6,586 7,543 -6.9% -18.7% 33,322 30,110 10.7%
    PATM (%) 16.4% 17.2% 23.4% -80 bps -700 bps 22.70% 24.75% -205 bps
    EPS (In Rs.) 14.79 15.72 13.56 -5.9% 9.1% 57.63 52.52 9.7%
    Segment Revenue (In Rs. Cr.) Q4FY23 Q3FY23 Q4FY22 QoQ% YoY% FY23 FY22 YoY%
    BFSI 10,818 11,235 10,096 -3.7% 7.2% 43,763 38,902 12.5%
    Retail 5,537 5,480 4,617 1.0% 19.9% 21,204 17,734 19.6%
    Communication 4,411 4,710 4,132 -6.3% 6.8% 18,086 15,182 19.1%
    Energy, Utilities, Resources & Services 4,825 4,957 3,872 -2.7% 24.6% 18,539 14,484 28.0%
    Manufacturing 5,078 5,099 3,816 -0.4% 33.1% 19,035 13,336 42.7%
    Hi-Tech 2,989 3,095 2,649 -3.4% 12.8% 11,867 10,036 18.2%
    Life Sciences 2,681 2,695 2,140 -0.5% 25.3% 10,085 8,517 18.4%
    Other Segments 1,102 1,047 954 5.3% 15.5% 4,188 3,450 21.4%
    Geography Revenue % Q4FY23 Q3FY23 Q4FY22 QoQ YoY
    North America 61.0 62.0 61.4 -100 bps -40 bps
    Europe 27.0 25.8 25.2 120 bps 180 bps
    Rest of the World 9.4 9.8 10.2 -40 bps -80 bps
    India 2.6 2.4 3.2 20 bps -60 bps
    Source: Company website, EWL Research

    Disclosure in pursuance of Section 19 of SEBI (RA) Regulation 2014

    Elite Wealth Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision.
    For analyst certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by Elite Wealth Limited are registered/qualified as research analysts with SEBI in India.( SEBI Registration No.: INH100002300)
    Disclosure Appendix
    Analyst Certification (For Reports)
    Israil Khan, Elite Wealth Limited,
    The analyst(s) certify that all of the views expressed in this report accurately reflect my/our personal views about the subject company or companies and its or their securities. I/We also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Elite Wealth Limited.
    As to each individual report referenced herein, the primary research analyst(s) named within the report individually certify, with respect to each security or issuer that the analyst covered in the report, that:
    (1) all of the views expressed in the report accurately reflect his or her personal views about any and all of the subject securities or issuers; and
    (2) no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in the report.
    For individual analyst certifications, please refer to the disclosure section at the end of the attached individual notes.
    Research Excerpts
    This note may include excerpts from previously published research. For access to the full reports, including analyst certification and important disclosures, investment thesis, valuation methodology, and risks to rating and price targets, please visit
    Company-Specific Disclosures
    Important disclosures, including price charts, are available and all Elite Wealth Limited covered companies by visiting, or emailing with your request. Elite Wealth Limited may screen companies based on Strategy, Technical, and Quantitative Research. For important disclosures for these companies, please e-mail
    Options related research:
    If the information contained herein regards options related research, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the risk disclosure documents, please contact your Broker’s Representative or visit the OCC’s website at
    Other Disclosures
    All research reports made available to clients are simultaneously available on our client websites. Not all research content is redistributed, e-mailed or made available to third-party aggregators. For all research reports available on a particular stock, please contact your respective broker’s sales person.
    Ownership and material conflicts of interest Disclosure
    Elite Wealth Limited policy prohibits its analysts, professionals reporting to analysts from owning securities of any company in the analyst’s area of coverage. Analyst compensation: Analysts are salary based permanent employees of Elite Wealth Limited. Analyst as officer or director: Elite Wealth Limited policy prohibits its analysts, persons reporting to analysts from serving as an officer, director, board member or employee of any company in the analyst’s area of coverage.
    Country Specific Disclosures
    India – For private circulation only, not for sale.
    Legal Entities Disclosures
    Mr. Ravinder Parkash Seth is the Managing Director of Elite Wealth Ltd (EWL, henceforth), having its registered office at Casa Picasso, Golf Course Extension, Near Rajesh Pilot Chowk, Radha Swami, Sector-61, Gurgaon-122001 Haryana, is a SEBI registered Research Analyst and is regulated by Securities and Exchange Board of India. Telephone:011-43035555, Facsimile: 011-22795783 and Website:
    EWL discloses all material information about itself including its business activity, disciplinary history, the terms and conditions on which it offers research report, details of associates and such other information as is necessary to take an investment decision, including the following:
    1. Reports
    a) EWL or his associate or his relative has no financial interest in the subject company and the nature of such financial interest;
    (b) EWL or its associates or relatives, have no actual/beneficial ownership of one per cent. or more in the securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance;
    (c) EWL or its associate or his relative, has no other material conflict of interest at the time of publication of the research report or at the time of public appearance;
    2. Compensation
    (a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
    (b) EWL or its associates have not managed or co-managed public offering of securities for the subject company in the past twelve months;
    (c) EWL or its associates have not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months;
    (d) EWL or its associates have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months;
    (e) EWL or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with the research report.
    3 In respect of Public Appearances
    (a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
    (b) The subject company is not now or never a client during twelve months preceding the date of distribution of the research report and the types of services provided by EWL