Infosys Q3 Results: Net profit rises over 13%, FY23 revenue guidance revised higher

India’s second top IT company Infosys Ltd has announced its earnings for the third quarter ended December 2022 for the current fiscal or Q3 FY23 on Thursday, after market hours. Its net profit came ahead of estimates at ₹6,586 crore while raising revenue guidance for FY23. Infosys shares closed nearly a per cent higher at ₹1,482 apiece on the BSE ahead of its Q3 results announcement.

HCLTech beats Q3 profit on strong deal wins

HCL Tech has reported a higher-than-expected profit for the December quarter helped by strong deal wins, but lowered its full-year revenue view citing seasonal challenges in the fourth quarter.

HCL Tech adds nearly 6,000 freshers, attrition rate at 21.7%
HCL Technologies added 5,892 freshers during the quarter ending December 30, 2022 (Q3FY23) period. The company’s total employees count stood at 222,270 in the quarter under review.

For the quarter, HCL Tech’s attrition (LTM) was at 21.7%, lower than the same September quarter of the fiscal year, where it stood at 23.8%.

HCL Tech announces interim dividend of ₹10 per share

HCL Tech has declared a fourth interim dividend of ₹10 per equity share. The record date is set as 20 January, 2023. The payment for the said interim dividend shall be made on 1 February, 2023.

This is the fourth interim dividend announced by the IT giant.

HCL Tech Q3 net profit up by 19% to ₹3,489 crore

IT services major HCL Technologies (HCL Tech) reported 19% rise in consolidated net profit at ₹4,096 crore for the December quarter (Q3FY23) as against ₹3,442 crore in the corresponding quarter last fiscal.

The company’s revenue from operations rose 19.5% to ₹26,700 crore as against ₹22,331 crore in the year-ago period.

While, on a sequential basis, the profit after tax (PAT) rose 17% from ₹3,489 crore in the previous September quarter.

Brokerage Emkay’s first cut on Infy Q3

Actual vs expectations: Revenue above our expectations, while EBITM was tad below our/consensus expectations

Likely stock reaction: Neutral to positive

Key positives: Revenue beat, large deal intake of USD3.3bn, FY23 revenue growth guidance increased to 16-16.5% CC, LTM attrition moderated by 280bps QoQ.

Infosys’ profit beat was in contrast to that of larger rival Tata Consultancy Services Ltd, which missed profit estimates and flagged challenges in Europe as clients tightened spending due to rough economic conditions

Clients addition

Gross addition of clients for the company during the quarter rose to 134, from 111 a year ago

Infosys’ employees

In terms of total headcount, Infosys had total employees of 3,46,845 in Q3FY23, a net addition of 1,627 employees compared to 3,45,218 employees in Q2 of FY23.

Compared to the Q3FY22 quarter where the headcount was at 2,92,067 employees, Infosys’ net addition stood at 54,778 employees in Q3FY23

Digital revenue

Digital revenue comprised 62.9% of overall revenues and grew at 21.7% in constant currency (cc)

Infosys CFO on margin

“Operating margins in Q3 remained resilient due to cost optimization benefits which offset the impact of seasonal weakness in operating parameters”, said Nilanjan Roy, Chief Financial Officer. “Attrition reduced meaningfully during the quarter and is expected to decline further in the near-term”, he added

Infosys’ attrition rate

Infosys’ attrition rate of IT services stood at 24.3% in the December 2022 quarter, down by 2.8% from 27.1% in September 2022 quarter. During the June 2022 quarter, the attrition rate was 28.4%

Infosys CEO on Q3 results

“Our revenue growth was strong in the quarter, with both digital business and core services growing. As reflected in the large deals momentum, we continue to gain market share as a trusted transformation and operational partner for our clients. Our end-to-end capabilities and global scale make us a preferred choice as clients look at consolidating vendors. We remain focused on helping businesses accelerate their digital agenda to uncover new value and growth, as well as improve operational and cost effectiveness”, said Salil Parekh, CEO and MD

Deal TCV

Large deal TCV for the quarter under review was the strongest in the last 8 quarters at $3.3 billion

Revenue in cc terms

Revenues in constant currency (CC) terms grew by 13.7% YoY and 2.4% QoQ. The company said that Year on year growth was in double digits for most business segments and geographical regions in constant currency terms

Infosys’ net profit beats estimates

The IT services company’s profit beat estimates, helped by a strong deal pipeline despite a challenging macro environment. Analysts on average had expected a profit of ₹6,500 crore, according to Refinitiv IBES data

Infosys margin

The company’s operating margin came at 21.5%, down from 23.5% as against the year ago quarter, whereas it was flat from 21.5% in the previous quarter ended September 2022

Infosys Q3 revenue

The IT company’s revenue grew 20% YoY to ₹38,318 crore from ₹31,867 crore. It was up 5% quarter-on-quarter (QoQ) from ₹36,538 crore

Infosys FY23 guidance revised

Infosys has raised its FY23 revenue guidance to 16.0%-16.5% from 15%-16%. FY23 operating margin guidance has been retained at 21%-22%.

Infosys revenue estimates

Infosys is expected to post 0.8%-4% revenue growth in the said quarter. Jefferies expects revenue growth to be soft at 0.8% (QoQ) at $4,590 million due to higher than expected furloughs. Whereas, Axis Securities feels the company could report revenue growth of 4% QoQ

Cyient reports Q3 earnings

Cyient reported a net profit at ₹156 crore during Q3, up about 19% from ₹131 crore during the year-ago quarter, whereas it was up 97% from the previous quarter

Its revenue came at ₹1,618 crore, up 37% against ₹1,183 crore year-on-year (YoY)

Infosys shares trade higher

Ahead of the company’s earnings announcement, Infosys shares were trading almost flat with 0.05% gain at ₹1,472 apiece on the BSE in Thursday’s session