Deal pipeline strong, will hire 50,000 freshers in the current financial year: Managing Director Parekh
Deal pipeline strong, will hire 50,000 freshers in the current financial year: Managing Director Parekh
Bengaluru-based IT services company Infosys on Sunday reported a 3.2% increase in net profit to ₹5,360 crore for the first quarter ended June.
The figures, however, show a sequential decline of 5.7% from the previous quarter ended March.
Total revenue grew by 23.6% to ₹34,470 crore.
Revenue growth was broad across all regions, with each business growing in double digits and many growing by more than 25%, the company said in a statement. Digital business accounts for 61% of the total revenue, growing at 37.5%. However, supply-side challenges, higher travel costs and rising wages impacted margins. Total expenses rose more than 29%, while operating margin for the June quarter declined 3.6% year-on-year to 20.1%.
“We reported a strong Q1 amid an uncertain economic environment,” said Salil Parekh, CEO and MD, at the virtual media conference. “We continue to gain market share and see a significant pipeline driven by our Cobalt Cloud capabilities and differentiated digital value proposition,” he said.
Infosys raised its expectation of revenue growth in the current fiscal to 14%-16% from an earlier estimated 13%-15% on a strong demand outlook.
Infosys saw its big deal signing fall nearly 35%, while gross customer growth during the quarter declined to 106 from 113 a year ago.
“Our pipeline for big deals is higher than 3-6 months ago. Based on our current visibility, we are seeing decent volume in the pipeline and the size of large deals also remain strong overall. The outlook for larger deals is looking good for the US and European markets and Australia as well, while we expand into Japan and Singapore. All these have given us the confidence to increase our guidance at this time,” Mr. Parekh said.
The technology services firm said the company hired 21,171 people in the quarter and plans to recruit 50,000 freshers during the fiscal.
Attrition increased to 28.4% this quarter on a 12-month basis, from 27.7% in the previous quarter.
Chief Financial Officer Nilanjan Roy said: “We are driving strong growth momentum with strategic investments in talent through recruitment and competitive compensation revision. While this will impact margins in the immediate term, it is expected to increase due to attrition. level, and position us well for future growth.”
Infosys’ big IT rival Tata Consultancy Services and smaller rivals like HCL Technologies and Wipro have also seen their margins fall as they grapple with a high sector-wide talent churn and are trying to retain employees.
April-June quarterly earnings reports have started on a weak note for Indian IT services companies, with TCS, HCL Technologies and Wipro also missing their first quarter profit estimates.
(with Reuters inputs)