Infosys Q2 Results – Results for the Second Quarter ended September 30, 2023

Infosys Q2 Results: Key Highlights (QoQ)

On October 12, 2023: Infosys (NSE, BSE, NYSE: INFY) announced its Q2 2023 financial results, showcasing remarkable growth and strategic success.

Infosys, the second-largest software services exporter, announced its quarterly results for the period ending in September.

• Revenues showed growth in constant currency (CC) terms, with a 2.5% year-on-year (YoY) increase and a 2.3% quarter-on-quarter (QoQ) increase.

• The reported revenues reached ₹38,994 crore, demonstrating a robust 6.7% YoY growth.

• The operating margin stood at 21.2%, experiencing a slight decline of 0.3% YoY but a positive increase of 0.4% QoQ.

• Basic Earnings Per Share (EPS) reached ₹15.01, showing a healthy 4.6% YoY growth.

• The Free Cash Flow (FCF) amounted to ₹5,536 crore, with a significant 16.5% YoY growth. The FCF conversion rate reached 89.1% of net profit, indicating efficient cash management.

Additional Read: Q2 Results Dashboard

For the second time in a row, Infosys Ltd. has adjusted its revenue growth outlook for fiscal 2024, reflecting the anticipated slowdown in the Indian IT services industry. In the quarter ending September, the company’s revenue increased by 2.8% to reach Rs 38,994 crore, as reported in an exchange filing on 12 October, 2023. 

Infosys Revenue

Infosys reported Q2 revenues of $4,718 million, marking a year-on-year growth of 2.5% and a sequential growth of 2.3% in constant currency.

Large Deal TCV

The company secured large deals worth $7.7 billion in the quarter, with a net new of 48%.

Operating Margin

Infosys achieved an operating margin of 21.2% for the quarter, showing a sequential increase of 40 basis points.

Attrition

Attrition declined to 14.6%, demonstrating employee retention and satisfaction.

Guidance

The FY24 revenue guidance has been revised to 1.0%-2.5%, while the operating margin guidance remains at 20%-22%.

Additional Read: Infosys Share Price

Infosys Leadership Perspective

Salil Parekh, CEO and MD of Infosys, highlighted, “We had our highest large deals value at $7.7 billion in Q2 spread across all verticals and geographies. This, in an uncertain macro-environment, is a testament to our ability to pivot and stay relevant to the evolving client needs, by delivering the benefits of transformation as well as productivity and cost savings at scale. Strong H1 performance with significant large deal wins, builds a solid foundation for the future. The growing adoption of our Generative AI offering, Topaz, is helping us deliver consistent value and expand market share.”

Impressive Q2 Performance: 21.2% Operating Margin Reflects Success of Margin Improvement Strategy

Nilanjan Roy, CFO, highlighted that our Q2 operating margin of 21.2% underscores the early successes of our recently introduced margin enhancement plan and signifies our ongoing ability to pinpoint opportunities for operational efficiency improvements. In adherence to our capital allocation policy, the Board has approved an interim dividend of ₹18 per share, marking a substantial 9.1% increase from the previous year.”

Revenue Growth – Q2 24

	Reported	CC
QoQ Growth (%)	2.2%	2.3%
YoY Growth (%)	3.6%	2.5%

Infosys Revenues by Business Segment 

in %

	Quarter Ended			YoY Growth
	Sep 30, 2023	June 30, 2023	Sep 30, 2022	Reported	CC
Financial Services	27.5	28.1	30.5	(6.8)	(7.3)
Retail	15.2	14.5	14.2	10.7	9.2
Communication	11.4	11.7	12.3	(3.8)	(4.3)
Energy, Utilities, Resources & Services	12.7	12.9	12.3	6.7	5.1
Manufacturing	14.3	14.1	12.8	15.9	12.6
Hi-Tech	7.8	8.1	8.2	(0.4)	(0.6)
Life Sciences	7.8	7.2	6.7	20.7	18.4
Others	3.3	3.4	3.0	12.8	15.3
Total	100.0	100.0	100.0	3.6	2.5

About Infosys

• Infosys, a global leader in next-generation digital services and consulting, boasts a dedicated workforce of over 300,000 individuals. Our mission is to enhance human potential and pave the way for the next opportunities in the realms of individuals, businesses, and communities.
• It provides its expertise to clients in more than 56 countries, guiding them through their digital transformation journey. With over four decades of experience in managing global enterprises, we skillfully assist clients in harnessing the power of the cloud during their digital transformation.
• Infosys’s approach involves equipping clients with an AI-powered core, enabling agile digital solutions at scale, and fostering continuous improvement through ongoing learning. They achieve this by sharing digital skills, expertise, and innovative ideas from our vibrant innovation ecosystem.
• Beyond its technological prowess, they are deeply committed to upholding strong governance and environmental sustainability. We foster an inclusive workplace where diverse talents can thrive.

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Sources: 

1. https://www.infosys.com/investors/reports-filings/quarterly-results/2023-2024/q2/documents/ifrs-inr-press-release.pdf
2. https://www.infosys.com/investors/reports-filings/quarterly-results/2023-2024/q2/documents/fact-sheet.pdf