Infosys raises full year revenue forecast, to roll out salary hikes

Infosys on Wednesday raised its revenue forecast upward to 2-3% in constant currency terms for the financial year ended March 21, from 0-2% earlier. 

The full year operating margin guidance was also revised upward to 23-24%, against 21-23% earlier.

The Bengaluru-based Information technology (IT) services major said in its earnings call that it will roll out salary increases, promotions across all levels with effect from January 1. It also mentioned giving 100% variable pay along with a special incentive for the second quarter.

The company reported a net profit of Rs 4,845 crore for the quarter ended September 2020, a rise of 20.6% compared to the Rs 4,019 crore profit the company posted for the corresponding quarter last year. Sequentially, net profit grew by 14.5%.

The results are different from its peers TCS and Wipro, which posted profit degrowth in the second quarter.

The second quarter’s operational revenue stood at Rs 24,570 crore, up from Rs 22,629, a year earlier. The operating profit also rose to Rs 6,228 crore, growth of 26.8% (YoY).

The better-than-expected quarterly performance was attributed to the deal wins the company witnessed this financial year. Infosys signed deals worth $3.15 billion in this quarter which is the highest ever for the company, chief executive officer Pravin Rao said. The most significant one being the multi-year partnership deal with Pennsylvania-based investment management firm Vanguard, which was signed in July. 

Revenue from software services stood at Rs 22,728 crore for the quarter, versus Rs 21,177 crore, a year ago.

The company declared an interim dividend of Rs 12 per equity share and fixed October 26, 2020 as record date for interim dividend and November 11, 2020 as payment date.

“Our second quarter performance is a clear reflection of our ability to help clients on their digital transformation journeys. Our 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 and 25.4% growth from digital offerings, which now are at 47.3% of revenues,” Salil Parekh, CEO and MD of Infosys said.

“Increase in revenue and margin outlook for FY 21 is due to the continued trust clients have in us," he added.