India’s second-largest IT company Infosys on Thursday reported an 11.7 per cent decline in consolidated net profit to Rs 7,033 crore for the March quarter mainly on account of compensation to employees, and acquisitions during the reported period.
Illustration: Dado Ruvic/Reuters
It had posted a profit (attributable to owners of the company) of Rs 7,969 crore in the year-ago period.
Infosys CEO and MD Salil Parekh said the company has guided for a revenue growth of 0-3 per cent in constant currency terms in the current fiscal year due to uncertainty in the environment.
Infosys CFO Jayesh Sanghrajka said the company is on track to hire 20,000 freshers this fiscal year, as announced earlier.
Talking about decline in the margin, Sanghrajka said margins were 30 basis points lower on a quarter-on-quarter basis.
“The biggest headwind we had was because of the comp (compensation) that we had announced.
“A large part of our employees got a compensation increase effective first of January, and that impacted by 140 basis points.
“We had 40 basis points on account of amortization of intangibles for the acquisition that we made. Those were the headwinds,” he said.
Infosys recorded about 8 per cent increase in employee benefit around Rs 22,000 crore.
The company’s total employee base increased about 6,000 on a year-on-year basis to over 3.23 lakh at the end of the March quarter.
Revenues for the quarter under review came in at Rs 40,925 crore, 7.9 per cent higher from Rs 37,923 crore in Q4 FY24.
Sequentially, the company’s profits rose 3.3 per cent, but revenues declined 2 per cent.
For the full FY25, profits saw a marginal increase of 1.8 per cent to Rs 26,713 crore, according to a regulatory filing.
Revenues climbed 6.06 per cent to reach Rs 162,990 crore — exceeded its guidance of 4.5-5 per cent for the full FY25.
The company bagged a large deal with a total contract value of $11.6 billion for the year, with 56 per cent net new wins.
The operating margin of the company increased 0.9 per cent year-on-year while there was a 0.3 per cent decline in the margin on a quarter-on-quarter basis.
“We have built a resilient organisation with sharp focus on client-centricity and responsiveness to the market, thanks to the trust of our clients and dedication of our employees,” Parekh said.
“Our performance for the year has been robust in terms of revenues, expansion in operating margins and highest-ever free cash generation.
“Our depth in AI, cloud and digital and strength in cost-efficiency, automation, and consolidation position us well for the needs of our clients,” Parekh said.
He said the company has improved margins despite multiple headwinds.
“We have paid higher variable pay to our employees.
“We had many of the large deals ramping up during this period. We did an acquisition, so there was an acquisition-related impact.
“Despite all of those headwinds, we have been able to increase our margins by 50 basis points,” Parekh said.
He said there has been an increased demand for deployment of AI agents across clients.
“There are about 400 AI projects that we are working on where we see a lot of these sorts of benefits that we are sharing with clients,” Parekh said.
As per the filing, the company’s cash flow for 2024-25 was $4.1 billion. Sanghrajka said the amount was the highest-ever in the company’s history.
Infosys’s employee count at the end of FY25 was 323,578.
Talking about the hiring, Sanghrajka said hiring 20,000 is a combination of backfilling the attrition and growth.
“We had 14 per cent attrition this quarter. If you look at the math, it adds up with the guidance that we have had.
“We are very confident at this point in time of hiring 20,000 freshers through the year in line with our guidance,” he said.
The Infosys board has proposed a final dividend of Rs 22, which, along with the interim dividend, is an increase of 13.2 per cent over last year.
Shares of Infosys settled at Rs 1,420.20 apiece on the BSE on Thursday, 0.51 per cent higher than the previous close. Infosys results were declared after the market closing hours.
