Infosys: Strong growth of 13.7% in constant currency in a seasonally weak quarter
PR99450
BENGALURU, India, Jan. 12, 2023 /PRNewswire=KYODO JBN/ --
- Strongest large deal wins in the last 8 quarters at $3.3 billion
- Revenue guidance for FY23 revised to 16.0%-16.5%
Infosys (NSE: INFY) (BSE: INFY) (NYSE: INFY), a global leader in
next-generation digital services and consulting, reported strong Q3 performance
with year-on-year growth at 13.7% and sequential growth at 2.4% in constant
currency. Year on year growth was in double digits for most business segments
and geographical regions in constant currency terms. Large deal TCV for the
quarter was the strongest in the last 8 quarters at $3.3 billion. Digital
comprised 62.9% of overall revenues and grew at 21.7% in constant currency.
Operating margin for the quarter remained resilient at 21.5%. FY23 revenue
guidance revised to 16.0%-16.5%. FY23 operating margin guidance retained at
21%-22%.
"Our revenue growth was strong in the quarter, with both digital business and
core services growing. This is a clear reflection of our deep client relevance,
industry-leading digital, cloud, and automation capabilities, and the
unrelenting dedication of our employees", said Salil Parekh, CEO and MD. "As
reflected in the large deals momentum, we continue to gain market share as a
trusted transformation and operational partner for our clients. Our end-to-end
capabilities and global scale make us a preferred choice as clients look at
consolidating vendors. We remain focused on helping businesses accelerate their
digital agenda to uncover new value and growth, as well as improve operational
and cost effectiveness," he added.
21.7% YoY
CC Digital growth
13.7% YoY
2.4% QoQ
CC Revenue growth
21.5 %
Operating margin
13.4% YoY
Increase in EPS
(INR terms)
$3.3 bn
Large deal TCV
1. Key highlights:
For the quarter ended December 31, 2022
• Revenues in CC terms grew by 13.7% YoY and 2.4% QoQ
• Reported revenues at $4,659 million, growth of 9.6% YoY
• Digital revenues at 62.9% of total revenues, YoY CC growth of 21.7%
• Operating margin at 21.5%, decline of 2.0% YoY and stable QoQ
• Basic EPS at $0.19, growth of 3.3% YoY
• FCF at $576 million, decline of 19.9% YoY; FCF conversion at 72.0% of net
profit
For nine months ended December 31, 2022
• Revenues in CC terms grew by 17.8% YoY
• Reported revenues at $13,657 million, growth of 13.5% YoY
• Digital revenues at 61.9% of total revenues, YoY CC growth of 29.5%
• Operating margin at 21.0%, decline of 2.6% YoY
• Basic EPS at $0.53, growth of 1.7% YoY
• FCF at $1,821 million, decline of 20.6% YoY; FCF conversion at 81.4% of net
profit
"Operating margins in Q3 remained resilient due to cost optimization benefits
which offset the impact of seasonal weakness in operating parameters", said
Nilanjan Roy, Chief Financial Officer. "Attrition reduced meaningfully during
the quarter and is expected to decline further in the near-term," he added.
2. Capital Allocation
Pursuant to the Board recommendation and subsequent to shareholders' approval
through postal ballot, the company has started share buyback program through
open market route from December 7, 2022 and till date, has bought back 31.3
million shares worth ₹4,790 crore (app. $0.6 billion*) or 51.5% of total
authorization of ₹9,300 crore at an average price of approx. ₹1,531
per share (compared to maximum Buyback Price of ₹1,850 per share).
*USD-INR rate of 82.00
3. Client wins & Testimonials
• Centric Brands has selected Infosys to be a strategic technology partner to
provide a range of digital, IT, business operations and transformation
services. Infosys will leverage its cognitive first IT framework along with its
industry leading digital, cognitive AI, cloud and retail industry solution
accelerators to improve and transform the technology landscape. Anurup Pruthi,
Global CFO, Centric Brands, said, "By partnering with Infosys, we will be able
to standardize our internal processes, bring in the best practices and tools,
and strengthen the skills needed for continued success in the Retail B2B
marketplace."
• Infosys helped develop a cloud-based platform to digitize and automate manual
processes at Envision AESC, a world-leading battery technology company's
Electric Vehicle (EV) battery manufacturing plants. "At Envision AESC, we
believe that advancements in battery technology will propel the EV revolution
to newer heights. The manufacturing processes of our breakthrough batteries
need a robust digital foundation to accelerate the speed and scale of
innovation. We are confident that Infosys, with their trusted cloud
technologies and deep expertise in the automotive industry, will help us
continue on our journey towards achieving our transformation goals," said,
Brian Sullivan, Executive Vice President of Global Manufacturing and Supply
Chain at Envision AESC.
• Infosys and Microsoft modernized Spark New Zealand's corporate functions to
enhance business resilience, operational simplicity, workplace agility, and
customer experience. Mark Beder, Chief Operating Officer, Spark, said, "As we
embarked on a journey to revamp our business operations and step out of our
legacy systems, we were looking for partners that understand and provide
strength to our vision for an ERP-driven business transformation. It has been
great working with Infosys and Microsoft as our transformation partners. The
level of ERP implementation expertise and scale they bring to the table in this
endeavor underpinned by best-fit digital solutions and resources is helping us
to unshackle legacy system constraints and will help us improve operational
simplicity, workplace agility and customer experience."
• Infosys collaborated with CIRCOR, one of the world's leading providers of
mission critical flow control products and services for the Industrial,
Aerospace & Defense markets, to help transform its IT landscape and modernize
its IT infrastructure. Pete Sattler, Chief Information Officer, CIRCOR, said,
"The goal of our alliance with Infosys is to offer all our customers – both
internal and external – faster and more reliable service, enhance our
cybersecurity, and provide 24x7 monitoring for our global IT environment."
• Avon, part of Natura Group, entered a five-year strategic collaboration with
Infosys to advance its digital transformation journey, implement cognitive
operations, drive continuous innovation, and help in better serving its
customers. Karen McElhatton, CIO, Avon, said, "Through this collaboration,
Infosys will accelerate the realization of our Digital vision, through a
well-planned transformation roadmap to reduce opex spends, increase resilience
and reliability of our application landscape, and prepare us better for new
digital capabilities. We are confident that Infosys, with its sound expertise
in Infrastructure Management Services, Cybersecurity, and Application Services,
will enable us to continue to provide cutting-edge services to our members and
customers."
• Conagra has entered into a five-year strategic partnership with Infosys to
innovate its IT operations. Conagra and Infosys will be implementing product
based cognitive-first delivery model, with focus on improving operational
excellence, drive continuous innovation, and most importantly improve the
quality of service for Conagra's customers. Andy Xydakis, CTO, Conagra, said,
"We wanted to change the way we run our IT operations. Delivering in true agile
fashion where teams focus on value delivery. Our partnership with Infosys will
help achieve the vision, given their deep Industry knowledge and ability to
align this new way of working to support our overarching business strategy.
Through this collaboration, Infosys will help accelerate the adoption of our
product based continuous delivery operating model, by creating capacity to
deliver features, increase resiliency and reliability of our infrastructure and
application landscape, thereby helping Conagra advance new digital
capabilities."
4. Recognitions
• Infosys received the Great Place to Work® Certification across five regions
including India, Australia, United Kingdom, Germany, and Mexico. Infosys BPM
received the Great Place to Work® Certification in Philippines
• Infosys recognized as the Champion of Inclusion in the Most Inclusive
Companies Index (MICI) and featured in the "100 Best – Hall of Fame" by Avtar &
Seramount, 2022
• Infosys secured a place in CDP's annual 'A List' for its leadership in
corporate transparency and performance on climate change
• Infosys rated as "Most Noteworthy" Company by DiversityInc, USA
• Infosys recognized as a constituent of the Dow Jones Sustainability World
Index for 2022
• Infosys InStep Ranked as the 'Best Internship Program' in the 2023 Vault
Internship Rankings
• Infosys won the 2022 Marketing Excellence Gold Award from Information
Technology Services Marketing Association (ITSMA) for Infosys Cobalt
• Infosys, along with client Lanxess recognized as a winner in the "Workplace
of the Future" category in 2022 ISG Paragon Awards™ EMEA
• Infosys positioned as a leader in Gartner Magic Quadrant for IT Services for
Communications Service Providers, Worldwide
• Infosys recognized as a leader in Forrester Wave™: Cloud Migration and
Managed Service Partners in Asia Pacific, Q4 2022
• Infosys positioned as a leader in IDC MarketScape: Asia/Pacific Salesforce
Implementation Services 2022 Vendor Assessment
• Infosys recognized as a leader in Software Product Engineering Services PEAK
Matrix® Assessment 2023 by Everest
• Infosys recognized as a leader in System Integration (SI) Capabilities on
Google Cloud Platform (GCP) PEAK Matrix® Assessment 2022 by Everest
• Infosys recognized as a leader in HFS Horizons: Cloud Native Transformation,
2022
• Infosys ranked as a leader in Next-Gen ADM Services 2022 ISG Provider lens™
study in US
• Infosys positioned as a leader in IDC Worldwide Manufacturing Service
Life-Cycle Management Strategic Consulting 2022
• Infosys recognized as a leader in Workplace Communication and Collaboration
(WCC) Services PEAK Matrix® Assessment 2023 by Everest
• Infosys positioned as a leader in IDC MarketScape: EMEA Industrial Internet
of Things Service Providers for Oil and Gas Companies 2022 Vendor Assessment
• Infosys recognized as a leader in Application and Digital Services (ADS) in
Property & Casualty (P&C) Insurance PEAK Matrix® Assessment 2023 by Everest
• Infosys recognized as a leader in Risk & Compliance in BFS IT Services PEAK
Matrix® Assessment 2023 by Everest
• Infosys positioned as a leader in Avasant's Utilities Digital Services
2022–2023 RadarViewTM
• Infosys positioned as a leader in Avasant's Manufacturing Digital Services
2022–2023 RadarViewTM
• Infosys Finacle positioned as a Leader in The Everest Group PEAK Matrix® for
Wealth Management Products Provider 2023 report
• Infosys BPM ranked as Leader and Star Performer in Everest Group's Finance
and Accounting Outsourcing (FAO) PEAK Matrix® Assessment 2022
About Infosys
Infosys is a global leader in next-generation digital services and consulting.
Over 300,000 of our people work to amplify human potential and create the next
opportunity for people, businesses and communities. With over four decades of
experience in managing the systems and workings of global enterprises, we
expertly steer clients, in more than 50 countries, as they navigate their
digital transformation powered by the cloud. We enable them with an AI-powered
core, empower the business with agile digital at scale and drive continuous
improvement with always-on learning through the transfer of digital skills,
expertise, and ideas from our innovation ecosystem. We are deeply committed to
being a well-governed, environmentally sustainable organization where diverse
talent thrives in an inclusive workplace.
Visit www.infosys.com to see how Infosys (NSE, BSE, NYSE: INFY) can help your
enterprise navigate your next.
Safe Harbor
This Release contains 'forward-looking statements' within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that involve substantial risks and uncertainties.
Forward-looking statements generally relate to future events or our future
financial or operating performance and that are based on our current
expectations, assumptions, estimates and projections about the Company, our
industry, economic conditions in the markets in which we operate, and certain
other matters. Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as 'may', 'anticipate', 'believe',
'estimate', 'expect', 'continue', 'intend', 'will', 'project', 'seek', 'could',
'would', 'should' and similar expressions. Those statements include, among
other things, statements regarding our business strategy, our expectations
concerning our market position, future operations, growth, margins,
profitability, attrition, liquidity, and capital resources, our ESG vision, our
capital allocation policy, the effects of COVID-19 on global economic
conditions and our business and operations, wage increases, change in the
regulations including immigration regulation and policies in the United States,
and corporate actions including timely completion of the proposed buy-back of
our equity shares. These statements are subject to known and unknown risks,
uncertainties and other factors which may cause actual results or outcomes to
differ materially from those implied by the forward-looking statements.
Additional risks that could affect our future operating results are more fully
described in our United States Securities and Exchange Commission filings
including our Annual Report on Form 20-F for the fiscal year ended March 31,
2022. These filings are available at www.sec.gov. Infosys may, from time to
time, make additional written and oral forward-looking statements, including
statements contained in the Company's filings with the Securities and Exchange
Commission and our reports to shareholders. The Company does not undertake to
update any forward-looking statements that may be made from time to time by or
on behalf of the Company unless it is required by law.
Infosys Limited and subsidiaries
Extracted from the Condensed Consolidated Balance Sheet under IFRS as
at: (Dollars in millions)
December 31, 2022 March 31, 2022
ASSETS
Current assets
Cash and cash equivalents
1,401 2,305
Current investments
1,055 880
Trade receivables
3,343 2,995
Unbilled revenue 1,588
1,526
Other Current assets
1,366 1,159
Total current assets
8,753 8,865
Non-current assets
Property, plant and equipment and Right-of-use assets
2,405 2,429
Goodwill and other Intangible assets
1,098 1,042
Non-current investments
1,497 1,801
Unbilled revenue
206 124
Other non-current assets 1,267
1,294
Total non-current assets 6,473
6,690
Total assets
15,226 15,555
LIABILITIES AND EQUITY
Current liabilities
Trade payables
579 545
Unearned revenue
861 834
Employee benefit obligations
290 288
Other current liabilities and provisions 3,251
2,766
Total current liabilities
4,981 4,433
Non-current liabilities
Lease liabilities
795 607
Other non-current liabilities
424 521
Total non-current liabilities
1,219 1,128
Total liabilities
6,200 5,561
Total equity attributable to equity holders of the company
8,975 9,941
Non-controlling interests
51 53
Total equity
9,026 9,994
Total liabilities and equity
15,226 15,555
Extracted from the Condensed Consolidated statement of Comprehensive Income
under IFRS for:
(Dollars in millions except per equity share data)
3 months ended 3 months ended 9 months ended 9 months ended
December 31, December 31, December 31, December 31,
2022 2021 2022 2021
Revenues 4,659 4,250 13,657 12,031
Cost of sales 3,230 2,856 9,544 8,041
Gross profit 1,429 1,394 4,113 3,990
Operating expenses:
Selling and marketing expenses 196 177 574 513
Administrative expenses 232 219 671 642
Total operating expenses 428 396 1,245 1,155
Operating profit 1,001 998 2,868 2,835
Other income, net (3) 84 61 229 203
Profit before income taxes 1,085 1,059 3,097 3,038
Income tax expense 285 283 859 823
Net profit (before minority interest) 800 776 2,238 2,215
Net profit (after minority interest) 800 774 2,237 2,211
Basic EPS ($) 0.19 0.18 0.53 0.52
Diluted EPS ($) 0.19 0.18 0.53 0.52
NOTES:
1. The above information is extracted from the audited condensed consolidated
Balance sheet and Statement of Comprehensive Income for the quarter and nine
months ended December 31, 2022, which have been taken on record at the Board
meeting held on January 12, 2023.
2. A Fact Sheet providing the operating metrics of the Company can be
downloaded from www.infosys.com.
3. Other income is net of Finance Cost.
4. The quarter figures added up to the figures reported in previous quarters
might not always add up to the nine months ended figures reported in this
statement as all figures are taken from the source and rounded off to the
nearest digits.
IFRS-INR Press Release:
Fact sheet:
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Source: Infosys
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