Infosys Share Q3 Results

Revenues were up 22.91% for the Dec-21 quarter at Rs.31,867 crore on a consolidated basis. Even on a sequential basis, the revenues were up by 7.65%, which is relatively healthy. BFSI accounted for one-third of the total revenues and about one third of the segment operating profits too. However, it was retail with operating margins of 35.3% stole the show.

Size of deals matters a lot in the IT space. During the quarter, Infosys signed mega deals worth $2.53 billion. At the same time, the all-important digital revenues grew by a healthy 42% YoY. In terms of revenue share, digital accounts for 58.5% of Infosys revenues, up 840 bps on a YoY basis and over 240 bps on a sequential basis.

Financial services of BFSI was stable at 31.5%,while the share of retail stood at 14.5%. Among other  sectoral practices, communications had a share of 12.5%, energy 11.7% and manufacturing 11.3%. North American dominated the regional revenue mix with 61.8% of the revenue share while Europe and UK account for 25% of revenues. Infosys currently has 1,738 clients  with over 50% being 1 million dollar plus clients and 37 clients in the big ticket bulge bracket of $100 million plus.

Operating profits were up 13.58% at Rs.7,484 crore but operating margins narrowed by 192 bps on YoY basis. Net profits were up 11.78% at Rs.5,809 crore on good traction in high value clients. Higher operating costs dented operating margins along expected lines.

PAT margins narrowed from 20.04% in Dec-20 quarter to 18.23% in Dec-21 quarter. Overall, it was a quarter of solid top line growth but operating margins coming under intense pressure due to higher sub-contracting and manpower costs.