IT major Infy trims guidance for FY23

Bengaluru: India's second largest IT services company Infosys on Wednesday posted an industry leading growth for FY22 though the company's growth for the fourth quarter missed the street estimates marginally. The IT firm also lowered its revenue guidance for FY23 as compared to FY22, indicating slowdown in the hyper demand environment globally.

For the quarter ended March, Infosys reported a net profit of Rs5,686 crore, a rise of 12 per cent year-on-year (YoY) basis, while its revenues stood at Rs 32,276 crore, which was an increase of 22.7 per cent over the same period last year. In constant currency term, revenue of Infosys stood at $4.28 billion, which was a rise of 1.2 per cent in sequential term.

For the whole fiscal, Infosys' revenue stood at $16.31 billion, a growth of 20.5 per cent over FY21. In constant currency term, revenue rose by 19.7 per cent, which is likely to be the highest rate of growth among all its large peers. The IT major continued to see momentum in large deal space with total contract value (TCV) of $9.5 billion for FY22. For the Q4, deal pipeline was at a $2.3 billion.The company has projected to grow its revenue by 13-15 per cent in constant currency term with an operating margin band 21-23 per cent.

"Infosys delivered highest annual growth in a decade with broad-based performance. We continue to gain market share as a result of sustained clients' confidence in our ability to successfully navigate their digital journeys", said Salil Parekh, CEO and MD of Infosys. Infosys reported an operating margin of 21.5 per cent, which was down by 3 per cent YoY for the fourth quarter. However, its operating margin for FY22 was at 23 per cent, which was in its guided range of 22-24 per cent for FY22.

"We are comfortable in maintaining this band. As we get into discussion with the clients during renewals, we will look at pushing the margins," said Nilanjan Roy, chief financial officer at Infosys.

The Bengaluru-headquartered IT firm reported a broad-based growth in the fourth quarter with its major verticals growing in double digit. While financial services vertical grew 14.1 per cent YoY basis, retail witnessed a growth of 16.5 per cent. The highest growth came from the manufacturing vertical that grew 50.6 per cent in the fourth quarter.

However, the company continued to see the trend of high attrition with no immediate stabilisation in sight. Attrition rose to 27.7 per cent in Q4 of FY22 from 25.5 per cent in the December quarter. Infosys said it expanded its fresher hiring programme to 85,000 for the year from the 55,000 it had shared earlier in its bid to tide over attrition and meeting high demand from clients. With regard to Infosys' association in Russia, the company said it has no plans to engage with any Russian business or enterprise going forward. "We intend not to work with Russian companies going ahead. Our current work in Russia was related to some global clients who had a presence in the country," Parekh said adding that Infosys has 100 employees working in its Russia office.