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Bengaluru, NFA Post: Amid global economic slump, IT bellwether Infosys on Wednesday registered a steller performance as its consolidated net profit went up 20.5% year-on-year (YoY) at Rs 4,845 crore for the quarter ended September 30, 2020 (Q2FY21).

Bengaluru-hedquartered information technology (IT) services major posted a profit of Rs 4,019 crore in the year-ago period. On a sequential basis, profit grew 14.45%.

Commenting on the company’s performance, Infosys CEO and MD Salil Parekh said the company’s second quarter performance is a clear reflection of Infosys ability to help clients on their digital transformation journeys.

“Increase in revenue and margin outlook for FY 21 is due to the continued trust clients have in us. I am extremely proud of our team for achieving these results in challenging business conditions globally,” said Infosys CEO and MD Salil Parekh.

Digital business spikes

Infosys CEO and MD Salil Parekh also highlighted the fact that the company’s digital and cloud capabilities combined with intense client relevance are helping us achieve differentiated results in the market as is visible in 2.2% year on year overall revenue growth.

“Our digital offerings grew 25.4% and it is now at 47.3% of revenues. Increase in revenue and margin outlook for FY 21 is due to the continued trust clients,” said Infosys CEO and MD Salil Parekh.

Infosys total revenue touched Rs 24,570 crore, registering a growth of 8.5% YoY and on a sequential basis registered a growth of 3.8%. While in constant currency terms revenues increased by 4% on a sequential basis and 2.2% YoY, Infosys revenues in US dollar terms touched $3,312 million, registering a YoY growth of 3.2% and and 6.1% on sequential baiss.

Operating margin

At the same time, operating profit for the quarter ending September 30, 2020 reached Rs Rs 6,228 crore, registering a growth of 26.8% on a YoY and 16.1% on a sequential basis. Operating margin stood at 25.4%, up 370 basis points on a YoY basis.

Infosys has revised its revenue growth guidance upward to 2% to 3% in constant currency for financial year 2020-21, from 0% to 2 % earlier. The full year operating margin guidance also revised upward to 23% to 24%, against 21% to 23% earlier.

Commenting on the Q2 performance, Infosys CFO Nilanjan Roy the company’s relentless efforts on cost optimization and strengthening operational efficiencies helped by certain cost deferrals led to 270 bps sequential improvement in operating margin to 25.4% and a 300 bps improvement in H1 margins.

“Going into the second half, some of these cost increases will now come back like wage hikes, promotions, hiring etc,” said Infosys CFO Nilanjan Roy,

Broad-based growth

Infosys Chief Operating Officer Pravin Rao said the strength and resilience of Infosys was fully visible in Q2 results announcement.

“With operating metrics witnessing a healthy increase, broad-based growth, highest ever large deal TCV at $3.15 bn and attrition reducing to single digits,” said Infosys Chief Operating Officer Pravin Rao.

“As recognition of employees’ stellar performance, we are giving 100% variable pay along with a special incentive for Q2. Additionally, we are rolling out salary increases and promotions across all levels effective January 1,” added Infosys Chief Operating Officer Pravin Rao.

Infosys also announced an interim dividend of Rs 12 per equity share and fixed October 26, 2020 as the record date for interim dividend and November 11, 2020, as the payment date.

Voluntary attrition (annualized – IT services) rate declined significantly to 7.8% in September quarter, from 11.7% in June quarter and 18.3% in year-ago period.

Infosys added around 5,000 freshers and 2,500 new lateral hirers during the second quarter taking the total employee strength to over 2.40 lakh as of September end. The company is moving ahead with its strategy to ad 16,000 freshers this fiscal and another 15,000 next year.

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