Infosys reported a 7.8% rise in net profit at Rs 6,128 crore for the fourth quarter ended March 2021, compared to Rs 5,684 crore in the corresponding period last year. However, the IT major has lowered its revenue guidance for FY24 to 4-7%, as against 16-16.5% projection made during Q3 earnings announcement in Jan.
The company attributed lower revenue growth guidance to clients’ insistence on higher efficiency and cost and consolidation opportunities which are rising due to digital transformation initiatives taken by them. On positive note, it’s resulting in a strong large deal pipeline and improved order book position going forward that will eventually aid revenue growth. Infosys’ FY24 revenue guidance marks the lowest in last five years.
Commenting on financial performance, Infosys’ CFO Nilanjan Roy said that the company delivered a strong margin performance with operating margin at 21% in FY23; however, it contracted by 50bps in Q4 due to the adverse impact of wage hikes and visa costs. He added that they have built capabilities and organizational resiliency during COVID-19 to ensure long-term growth and value creation for its stakeholders.
All in all, Infosys has raised investors’ concerns with its weak set of numbers as well as low revenue growth projection for FY24. Going forward, we expect investors to closely monitor the company’s progress vis-à-vis large deal pipeline and cost optimization initiatives to gauge its financial performance in the near-term.
Infosys is further taking strategic measures to improve efficiency and drive long-term growth. It has announced a buyback of shares worth Rs 9,200 crore and also plans to reduce employee attrition rate by 1%. The company aims to derive operational efficiencies from automation, cloud, analytics and artificial intelligence (AI) initiatives taken by them over the past few years. Additionally, they are focusing on scaling up delivery capabilities through deeper local market presence, building digital practices across different industries as well as driving innovative pricing models to capture the opportunities arising out of digital transformation initiatives such as cloud computing and big data analytics.
Source Page: https://www.bizzbuzz.news/corporate/infosys-lowers-guidance-for-fy24-1211491
