Infosys Ltd. - Q1 FY24 Earning Highlights | Globe Capital Market LTD.
Infosys Ltd. – Q1 FY24 Earning Highlights

Its earnings remained muted on a sequential basis in the June quarter, given a significant slowdown in business amid global macroeconomic headwinds.  

Q1 FY24 Earning Overview and Verdict
Rs. 1448
Lower than the market estimates

Earning Highlights Q1FY24:

  • The Company reported around 11% YoY growth in consolidated net profit for the June quarter to Rs 5,945 crore. Its bottomline is lower than the market estimates.
  • Consolidated revenue for the quarter increased by 10% YoY to Rs 37,933 crore. Consolidated sales grew a mere 1.3% sequentially, while the net profit dipped about 3%.
  • The Company has an EPS of Rs 14.35 as compare to Rs 12.78 same quarter last year.
  • Deal Wins – In the June quarter, Infosys bagged large deals worth $2.3 billion, a tad higher than $2.1 billion worth of deals won in the March quarter. As per the management, it had a solid Q1 with a growth of 4.2% and large deals of $2.3 billion, which helps to set a strong foundation for future growth. The Company has expanded the margin improvement program with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by its leadership team.
  • Attrition Level – The Company saw attrition levels coming down further in the quarter. The 12-month trailing attrition rate was down to 17.3% in the first quarter, from 20.9% a quarter ago. The attrition rate was as high as 28.4% in the June quarter last year.
  • The total employee strength as of June end was 3,36,294, down by 6,940 from a quarter ago.
  • As on June 30, 2023, the Company has consolidated cash & investments at Rs 29,469 crores.

Management Takeaways:

Q1FY24 operating margins were resilient in an uncertain macro environment on the back of its continued focus on cost optimization. Company’s rigorous operational discipline, including improved productivity measures and higher utilization helped margins for the quarter.

Future Guidance: sharply cut its FY24 revenue growth estimate. Infosys now sees revenue growing just 1-3.5% in constant currency terms, against 4-7% earlier. However, retained its operating margin guidance of 20-22% for FY24.

Valuation & View:

Its earnings remained muted on a sequential basis in the June quarter, given a significant slowdown in business amid global macroeconomic headwinds. At the CMP of Rs. 1448, the stock is trading at annualised P/E multiple of 25.4 times with the annualised EPS of Rs. 57.40, which is fairly valued.


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