Infosys - Q2 FY23 Earning Highlights | Globe Capital Market LTD.
Infosys – Q2 FY23 Earning Highlights

Beats market expectation on operating & net profit margin basis        

Q2 FY23 Earning Overview and Verdict
Rs. 1419
Beats the market estimates on margin front

Q2FY23 Earning Key Highlights

  • The Company reported Profit jumps of 11% YoY to Rs 6,021 crore & Revenue reported strong Q2 performance with YoY growth at 18.8% and sequential growth at 4.0% in constant currency. Year on year growth was in double digits across all business segments in constant currency terms.
  • Operating margin for the quarter increased sequentially by 140 bps to 21.5%. Large deal TCV for the quarter was robust at $2.7 bn, highest in last 7 quarters. FY 23 revenue guidance is revised to 15%-16%; operating margin guidance is also revised to 21%-22%.
  • Dividend: The Company declared an interim dividend of ൠ50/- per equity share & fixed October 28, 2022 as record date for interim dividend and November 10, 2022 as payout date.
  • Buyback of equity shares: The Board approved a proposal for the Company to buyback its own fully paid-up equity shares of face value of Rs. 5/- each (“Equity Shares”) from the equity shareholders of the Company (other than the promoters, the promoters group and persons in control of the Company), being 14.84% and 13.31% of its total paid-up capital and free reserves as on September 30, 2022 (on a standalone and consolidated basis, respectively) for an amount, payable in cash, aggregating up to Rs. 9,300 crore (Rupees Nine Thousand Three Hundred crore only) (“Maximum Buyback Size”) which is less than 15% of the aggregate of the total paid-up share capital and free reserves of the Company, based on the latest audited financial statements of the Company as at September 30, 2022 (on a standalone and consolidated basis), for a price not exceeding Rs. 1,850/- (Rupees One Thousand Eight Hundred and Fifty only) per Equity Share (“Maximum Buyback Price”), through the open market route through the Indian stock exchanges.

Management Takeaways: (FY’23 Guidance)

As per the management, its strong large deal wins and steady all-round growth in Q2 reflect the deep relevance and differentiation of its digital and cloud solutions for clients as they navigate their business transformation.

Guidance: The Company revised its FY23 revenue guidance to 15-16 per cent growth, tighter than 14-16% it had projected earlier. The operating margin guidance has been revised to 21-22%.

Valuation & View

As per the management its bookings and pipeline continue to be very strong that augurs well for its future growth. As the management has approved buy back of shares upto Rs. 1850 from open market hence I am expecting down is cushioned in Infosys. Hence, at the CMP of Rs 1450, the stock is trading at annualised P/E multiple of 24.6 times with the annualised EPS of Rs 57.24, which is fairly valued.




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