Infosys Q4 Profit Surges 30% to Rs 7,969 Crore, Eyes Future Growth

Infosys, a leading IT company, announced a significant 30% increase in its consolidated profit for the March 2024 quarter, reaching Rs 7,969 crore, up from Rs 6,128 crore in the same period last year. This financial uplift was disclosed in a recent regulatory filing. The company's consolidated revenue also saw a modest rise of 1.3% to Rs 37,923 crore compared to Rs 37,441 crore in the year-ago quarter.

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Looking ahead, Infosys has set its revenue growth expectation at 1-3% in constant currency for the fiscal year 2025 (FY25), with an operating margin forecast of 20-22%. Salil Parekh, Managing Director and CEO of Infosys, highlighted that the company's focus on digital transformation work remains steadfast as it enters FY25. Despite a challenging environment, Infosys anticipates a brighter outlook in financial services in the coming year, contrasting with a slower growth prediction for the manufacturing sector.

The company's operating margin stood at 20.1% for the reported quarter and slightly higher at 20.7% for the full fiscal year of 2024 (FY24). Over the fiscal year ended March 2024, Infosys saw an 8.9% increase in net profit to Rs 26,233 crore from Rs 24,095 crore in FY23. Additionally, annual income from operations rose by 4.7% to Rs 1,53,670 crore in FY24 from Rs 1,46,767 crore a year earlier.

Infosys reported a reduction in its employee headcount by 7.5%, bringing the total to 317,240 at the end of FY24 from 343,234 in FY23. Jayesh Sanghrajka, CFO of Infosys, attributed this decrease to improved utilisation rates and significantly lower attrition levels. The company's attrition rate was recorded at 12.6%.

The total contract value of Infosys's large deals in FY24 reached a record high of USD 17.7 billion, with over half being net new contracts. This achievement underscores the strong trust clients place in Infosys's capabilities, particularly in areas such as Generative AI and large language models.

In addition to its financial achievements, Infosys announced its intention to acquire German firm in-tech in an all-cash deal valued at approximately Rs 4,000 crore (450 million euros). This acquisition is poised to enhance Infosys's offerings in e-mobility and connected autonomous driving among other sectors. With in-tech's expertise and deep client relationships with major German OEMs, Infosys aims to bolster its presence and capabilities across various locations including Germany, Austria, China, the UK, and nearshore locations in Czech Republic, Romania, Spain, and India. The deal is expected to close in the first half of FY25.

The Infosys board has also recommended a final dividend of Rs 20 per equity share for FY24 along with a special dividend of Rs 8 per equity share. Furthermore, the board reviewed and approved a capital allocation policy for the next five years (FY25-FY29), aiming to return 85% to shareholders while progressively increasing the annual dividend per share. This decision comes on the back of achieving the highest free cash flow in the last eleven quarters during Q4 FY24.

This series of announcements from Infosys not only demonstrates its financial health but also underscores its strategic initiatives aimed at fostering growth and delivering value to shareholders amidst evolving market dynamics.