Infosys Q4 results below estimates

As the environment has changed, we see strong interest from our clients for efficiency, cost and consolidation opportunities, resulting in a strong large deal pipeline — Salil Parek, Infosys CEO and MD

Infosys Ltd on Thursday reported lowerthan-expected growth in the fourth quarter net profit and gave a weak 4-7 per cent revenue growth guidance for FY24 amid the tightening of IT budgets by clients following turmoil in the US banking sector.

Infosys’ latest report card was a disappointment on several fronts - the company missed revenue guidance for FY23 hit by “unplanned project ramp downs and decision-making delays by some clients”. With global macroeconomic uncertainties looming, it has given a subdued 4-7 per cent revenue growth forecast for FY24, with top management cautioning that “the environment remains uncertain”. Infosys had last given single-digit revenue guidance in FY2019.

India’s second-biggest software services firm posted 7.8 per cent year-on-year growth in consolidated net profit at Rs 6,128 crore in the January-March quarter. But the profit fell 7 per cent when compared to the preceding October-December quarter. The revenue growth in constant currency for FY23 came in at 15.4 per cent, lower than the guidance.

Notably, during the Q3 earnings announcement in January this year, Infosys which competes in the market with Tata Consultancy Services (TCS), Wipro and other IT firms had raised FY23 revenue guidance to 16-16.5 per cent (against the previously projected band of 15-16 per cent). Infosys’ Q4 year year-onyear-growth was 8.8 per cent and the sequential decline was 3.2 per cent in constant currency terms.

Revenue rose 16 per cent year-on-year in the fourth quarter of FY23 to Rs 37,441 crore but represented a decline of 2.3 per cent when compared to December 2022 quarter. Infosys expects to post revenue growth of between 4 per cent and 7 per cent for the current fiscal year ending March 2024, lower than analyst expectations.

The Bengaluru-based company sees FY24 operating margin in the range of 20-22 per cent. The conservative guidance comes on the back of ongoing upheaval in the US banking system and an uncertain global economy