Infosys posts 7.11% rise in Q1 profit; projects higher 3-4% revenue growth guidance for FY25

It has projected revenue growth guidance at 3-4 per cent as against 1-3 per cent earlier and operating margin guidance at 20-22 per cent for FY25. On July 11, Tata Consultancy Services (TCS) kicked off FY25 with an 8.72 per cent rise in net profit at Rs 12,040 crore for the first quarter (Q1) ended June 2024 as against Rs 11,074 crore in the same period of last year.

“Infosys delivered $4,714 million in Q1 revenues with a sequential growth of 3.6 per cent and year on year growth of 2.5 per cent in constant currency. Operating margin was at 21.1 per cent, a sequential expansion of 1 per cent,” the company said.

Free cash flow was highest ever at $1,094 million, an increase of 56.5 per cent year over year. “Number of large deal wins were highest ever at 34 with TCV of $4.1 billion, 57.6 per cent being net new,” it said.

Anticipating better results, Infosys shares closed 1.93 per cent higher at Rs 1,759.15 on the BSE on Thursday.

“We had an excellent start to FY25 with strong and broad-based growth, operating margin expansion, robust large deals and highest ever cash generation. This is a testimony to our differentiated service offerings, enormous client trust, and relentless execution,” said Salil Parekh, CEO and MD.

“With our focused approach for generative AI for enterprises working with their data sets on a cloud foundation, we have strong traction with our clients. This is building on our Topaz and Cobalt capabilities,” he said.

“Our relentless drive on cost optimization through Project Maximus, a comprehensive margin expansion program, is reflected in the all-round improvement in key operating metrices leading to 1.0 per cent growth in operating margin in Q1,” said Jayesh Sanghrajka, CFO. “We had the highest ever FCF generation at $1.1 bn and ROE increased to 33.6 per cent due to higher payouts to investors,” he said.

“Infosys has reported better than expected earnings, beating street estimates… also surprised to see FY25 revenue growth outlook raised to 3-4 per cent from 1-3 per cent earlier and margin guidance retained at 20-22 per cent. Free cash flow was highest ever at $1,094 million, an increase of 56.5 per cent year over year,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.