IT major Infosys reported a 7.8 per cent year-on-year (y-o-y) rise in its fourth quarter (Q4 FY23) net profit at ₹6,128 crore, missing street expectations. On a sequential basis, the profit dipped 7 per cent from ₹6,586 crore in Q3, weighed down by a tough macro-environment.

Revenue from operations stood at ₹37,441 crore, indicating a 16 per cent y-o-y rise; q-o-q, it dipped 2.3 per cent from ₹38,318 crore in Q3. In constant currency terms, the company’s revenue rose 8.8 per cent y-o-y and dipped 3.2 per cent q-o-q. Digital comprised 62.2 per cent of overall revenues and grew 15 per cent y-o-y in constant currency terms.

‘Uncertain environment’

“In Q4, we saw changes in the market environment; we saw unplanned project ramp-downs across different sectors — telecom, retail, high tech and financial services —  by some of our clients, and delays in decision-making which resulted in lower volumes. In addition, we had some a one-time revenue impact. While we saw some signs of stabilisation in March, the environment remains uncertain,” said Salil Parekh, MD & CEO.

Operating margins stood at 21 per cent, close to market expectations. The margin guidance for FY24 stands at 20-22 per cent, revised from the 21-22 per cent provided last quarter. On revenue, the company has given a guidance of 4-7 per cent growth in CC terms.

The company has also announced a final dividend of ₹17.50 per share. The total contract value of large deals in the quarter stood at $2.1 billion as against $3.3 billion in Q3.

‘Flexibility’

Nilanjan Roy, CFO, said: “The decline in revenue is due to volumes and the combination of one-timers like cancellations and specific client issues. Our margins have been stable throughout the year. The 20-22 per cent guidance gives us flexibility and we will have some headwinds like compensation and utilisation. Hence, we have a runway to increase the margins.”

The company’s total employee headcount fell by 3,611 to 3,43,234. The management said it has fulfilled its target of hiring 50,000 freshers and does not have a specific target for this fiscal. Voluntary attrition during the quarter fell to 20.9 per cent from 24.3 per cent in Q3.

With ChatGPT triggering the generative AI boom, Infosys said, “We are leveraging generative AI capabilities for our clients and within the company today. We have active programmes and projects with clients working with generative AI platforms to address specific areas, processes and libraries within their businesses.”

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