Infosys Q4 Results: Profit jumps 30% YoY to ₹7,969 crore

India’s second-largest IT services company Infosys on Thursday posted a 30% year-over-year (YoY) growth in its consolidated net profit at ₹7,969 crore for the quarter that ended March 2024. The same was at ₹6,128 crore in the consecutive quarter last year. Revenue from operations in the fourth quarter stood at ₹37,923 crore, a 1% increase from ₹37,441 crore in the previous year's quarter.
 
On April 12, Infosys' rival and India's largest IT services firm Tata Consultancy Services (TCS) reported a 9.14% YoY increase in consolidated net profit at ₹12,434 crore for the March quarter, compared to ₹11,392 crore in the same quarter last year. The company expressed optimism about AI, Cloud, Enterprise Solutions, Internet of Thing (IoT), and Cyber Security, which it believes drove growth in the quarter.
 
Infosys also declared a final dividend of ₹20 per equity share and a one-time dividend of ₹8 per share. The company announced the acquisition of German company, In-Tech Holding GmbH, an engineering, research, and development (ER&D) services provider.
 
“Our capabilities in Generative AI continue to expand. We are working on client programs, leveraging large language models with impact across software engineering, process optimisation, and customer support," said Salil Parekh, CEO and MD. “I would like to thank our 317,000 employees worldwide for their efforts in creating value for our clients.”
 
Parekh also expressed confidence in the company's large deal wins and positive outlook for discretionary and digital work as well as the deal pipeline.
 
Infosys also declared a final dividend of ₹20 per equity share and a one-time dividend of ₹8 per share.
 
“Free cash flow of $848 million in Q4 was highest in the last 11 quarters driven by our relentless focus to improve working capital cycle. Consistent to give high and predictable returns to shareholders, the Board has approved the capital allocation policy under which the company expects to return 85% over the next 5 years and progressively increase annual dividend per share," said Jayesh Sanghrajka, CFO.
 
The Bangalore-based company also saw its attrition rate dwindle further to 12.6% in the final quarter of FY24 as compared to 20.90% in Q4FY23. It stood at 17.30% in the first quarter of FY24 before dipping to 14.6% in Q2FY24. Attrition stood at 12.9% for the quarter ending on December 31 last year.
  
“The hiring model has changed significantly in the last few quarters,” said Parikh. We are now in a more agile model of campus hiring. We do campus hiring more than half the time from off campuses...fresher hiring off campuses…we will embark on that. At this point we are at 82% utilisation…so we still have headroom on that. Plus attrition is very low. So we have not decided on the campus hiring numbers at this point," officials added during a press conference.
 
Infosys slashed its revenue guidance for fiscal 2025 to 1-3% from 4-7% a year back, amidst uncertain demand conditions. The Bengaluru-based company has revised its annual revenue growth guidance five times in the previous five quarters. In January, it narrowed its revenue growth guidance for the full year to 1.5-2% for the full year. The move came after it had earlier slashed revenue guidance in September to 1-2.5% from 1-3.5%. Before that, the company had reduced its revenue guidance for the fiscal to 1-3.5% from 4-7%, amid an increasingly challenging demand environment.

Biswajit Maity, Sr Principal Analyst at Gartner, said, “Despite a minor decline in Q4 revenue, Infosys's future looks promising due to its strong customer focus and robust business pipeline. We remain optimistic about their growth prospects in the upcoming quarters. Their successful approach to securing large deals has led to significant contracts in recent years."

He added that by leveraging established client relationships, the company is launching multiple transformation projects focused on cost efficiency and value creation. Key factors that attract enterprise buyers to Infosys include competitive pricing, effective risk management, and innovation. These attributes solidify Infosys's position as a key player in the industry. Furthermore, Infosys has adeptly navigated challenges, demonstrating a higher level of competence compared to many of its peers.

Shares of Infosys on April 18 closed 0.41% higher at ₹1,420.55 on BSE ahead of its Q4FY24 results.