Infosys Q2 net profit rises 3.1% to Rs 6,215 crore
New Delhi: India’s second largest IT services firm Infosys on Thursday posted a 3.1 per cent rise in consolidated net profit to Rs 6,215 crore for the September 2023 quarter but trimmed the full-year revenue outlook to 1-2.5 per cent, citing a slowdown in decision-making and sustained pressure on discretionary spends.
On the positive side, the company clinched the highest-ever large and mega deal wins with a total contract value of $7.7 billion and announced that wage hikes will be rolled out from November 1.
Infosys, however, cautioned that discretionary projects and large transformation programmes have reduced significantly amid uncertain macro-environment.
The company cut its FY24 growth outlook by 100 basis points to 1-2.5 per cent, against 1-3.5 per cent guided earlier, a move bound to prolong analyst worries on demand for tech services offered by the $245 billion-Indian industry amid a weak macro environment.
Infosys - which competes in the IT services market with TCS, Wipro, HCL Technologies and others - saw its revenue rise 6.7 per cent to Rs 38,994 crore for the just-ended September quarter.
“On guidance, we are seeing discretionary projects and large transformation programmes have reduced significantly, and we are seeing decision-making continues to be slow. As we have looked at this quarter, the volumes are still under constraint and keeping that in mind, we have given our guidance for the full year,” Infosys CEO and MD Salil Parekh said at a briefing.
Telecom, hi-tech, financial services (payments, investment banking), and retail are among sectors that are seeing weak demand, Parekh said, adding that manufacturing and life science space continue to do well.
“On the digital programmes and the discretionary work, there is continuous attention by clients to reduce or stop them,” he said.
On the flip side, there is a “tremendous interest” in cost, efficiency, and automation-related projects, he said, adding that this is the space where Infosys has a huge advantage in the market and is gaining market share by winning large deals.
The mega deals are structured in a way that the scaling up is expected by the end of the year and beyond that, he pointed out. Wage hikes have been announced and will be rolled out from November 1 across all employees, Infosys CFO Nilanjan Roy said.
