Infosys ups revenue guidance for FY20

Company posts 5.2% growth in Q1 net profit to Rs 3,802 cr.

Infosys has increased its revenue growth guidance for FY20 to 8.5-10 per cent in constant currency. In April quarter, Infosys had said it expects a revenue growth of 7.5-9.5 per cent in FY 2019-20.
Infosys has increased its revenue growth guidance for FY20 to 8.5-10 per cent in constant currency. In April quarter, Infosys had said it expects a revenue growth of 7.5-9.5 per cent in FY 2019-20.

Mumbai: Infosys Ltd, the country's second-largest IT services firm on Friday reported 5.2 per cent growth in consolidated net profit to Rs 3,802 crore for the quarter ended June 30, 2019.

It had posted a net profit of Rs 3,612 crore in the April-June 2018 quarter, Infosys said in a BSE filing.

The Bengaluru-based firm's revenue from operations grew 13.9 per cent to Rs 21,803 crore in the June 2019 quarter, compared to Rs 19,128 crore in the year-ago period, it added.

Infosys has increased its revenue growth guidance for FY20 to 8.5-10 per cent in constant currency. In April quarter, Infosys had said it expects a revenue growth of 7.5-9.5 per cent in FY 2019-20.

"We had a strong start to FY'20 with constant currency growth accelerating to 12.4 per cent on year over year basis and digital revenue growth of 41.9 per cent. This was achieved through our consistent client focus and investments which have strengthened our client relationships," Infosys CEO and Managing Director Salil Parekh said.

He added that the company has consequently raised its revenue guidance for the year from 7.5-9.5 per cent to 8.5-10 per cent.

In dollars terms, the company's net profits grew to $546 million in the June quarter from $534 million in the year-ago period, while revenues rose to $3.13 billion as against $2.83 billion.

The company noted that its current policy entails paying up to 70 per cent of the free cash flow annually by way of dividend and/or buyback.

The Board has reviewed and approved a revised capital allocation policy after taking into consideration the strategic and operational cash requirements, it said.

"Effective from financial year 2020, the company expects to return approximately 85 per cent of the free cash flow cumulatively over a five-year period through a combination of semi-annual dividends and/or share buyback and/or special dividends, subject to applicable laws and requisite approvals, if any," it added.

The results were announced after the market hours. Infosys shares closed marginally higher at Rs 727.10 apiece on BSE.

Infosys said its digital revenue for the quarter at $1,119 million (35.7 per cent of total income) registered year-on-year growth of 41.9 per cent and sequential growth of 8.6 per cent in constant currency," the IT company said.

Large deal total contract value (TCV) was highest ever at $2.7 billion for Q1. "Segment growth was robust with all large regions and most verticals growing at double digits YoY in constant currency," Pravin Rao, COO said.

Brokerage house ICICI Direct remains positive on the stock as healthy deal wins, digital growth story and upward revision in guidance augurs well for the company.

"In terms of geography performance, revenue growth was led by North America and Rest of World which grew 3 per cent and 2.3 per cent QoQ in dollar terms respectively. Among verticals growth was led by energy & utilities (up 4.7 per cent QoQ) and communication vertical (up 4.6 per cent QoQ)," it said.

Infosys added two clients in $100 million+ category and six in $10 million+ band, with active clients increasing to 1,336 at end of June quarter from 1,279 in earlier quarter.