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Infosys reports biggest-ever quarterly deal wins in Q2: Key takeaways

Infosys reported a 2.21 per cent year-on-year drop in consolidated profit at Rs 4,019 crore.

, ETMarkets.com|
Oct 11, 2019, 05.16 PM IST
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IT bellwether Infosys’ September quarter numbers were marked by the biggest-ever quarterly deal wins, in-line profit and revenue growth and an upward revision of revenue guidance.

“Our performance was robust on multiple dimensions – revenue growth, digital growth, operating margins, operational efficiencies, large deal signings and a drop in attrition rate,” said MD and CEO Salil Parekh.

“All these are signs that we are progressing well in our journey of client-centricity and maximising value for our stakeholders,” he said.

Here are the key takeaways from the IT major’s September quarter earnings:

Profit falls, but meets estimates
Infosys reported a 2.21 per cent year-on-year drop in consolidated profit at Rs 4,019 crore against Rs 4,110 crore reported for the corresponding quarter last year. However, the bottom line was in line with expectations. Analysts in an ET NOW poll had estimated the profit figure at Rs 4,040 crore.

Active clients grow
No of active clients increased by 28 in the quarter. Total number of clients at the end of Q1 was 1,336, which increased to 1,364 at the end of Q2. However, client growth during the quarter was limited to the $1 million revenue bracket. The company failed to add any big client ($100m+ revenue contribution) during the quarter.

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Share of digital revenue
Share of revenue from digital offering grew from 31 per cent in Q2FY19 to 38.3 per cent Q2FY20. In June quarter, that share stood at 35.7 per cent.

North America top customer
The company consolidated its foothold in North America, generating 61.4 per cent of its total revenue from the continent. In the same quarter, last year, the revenue share from the region was 60.3 per cent. However, the share came down by 0.2 per cent sequentially.

Fin services, retail contribute half of revenue
Financial services and retail segments contributed nearly half of the revenue for the quarter, nearly the same as last quarter’s. Communications, energy, utilities, resources & services and manufacturing made significant contributions to the revenue pie.

FY20 revenue guidance raised
The firm increased the lower-end of FY20 revenue guidance. The revised guidance stands at 9-10 per cent in constant currency terms. Infosys maintained its operating margin guidance in the 21-23 per cent range.
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