Deal pipeline strong, will hire 50,000 freshers this fiscal, says managing director Parekh
Deal pipeline strong, will hire 50,000 freshers this fiscal, says managing director Parekh
Bengaluru-based IT services company Infosys on Sunday ported a 3.2% increase in net profit to ₹5,360 crore for the first quarter ended June.
However, the figures reflected a 5.7% decline sequentially from the previous quarter ended March.
Total revenue rose 23.6% to ₹34,470 crore.
Revenue growth was broad based across verticals with each business growing in double digits and several growing more than 25%, the company said in a statement. Digital business accounted for 61% of overall revenues, growing at 37.5%. However, supply-side challenges, higher travel costs and rising wages dented margins. Overall expenses surged more than 29%, while operating margins for the June quarter came in at 20.1%, down 3.6% year-on-year.
“We reported a strong Q1 amidst an uncertain economic environment,” said CEO and MD Salil Parekh in a 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 added.
Infosys raised its expectation for revenue growth in the current fiscal year to 14%-16% from the earlier projected 13%-15%, on strong demand outlook.
Infosys saw its large deal signings dropping about 35%, while gross addition of clients during the quarter dropped to 106 from 113 a year earlier.
“Our pipeline for larger deals is higher than what we had 3-6 months ago. Based on our current visibility, we are seeing good volumes in the pipeline and the size of large deals also overall remains strong. The outlook for large deals looks good for the U.S. and European markets, and also Australia, while we are expanding in Japan and Singapore. All these have given us confidence, at this moment, to raise our guidance,’‘ Mr. Parekh added.
The company hired 21,171 people in the quarter and has plans to recruit 50,000 freshers during the fiscal, the technology services firm said.
The quarter saw attrition rising to 28.4% on a last-12-month basis, from 27.7% in the immediately previous quarter.
Chief Financial Officer Nilanjan Roy said: ”We are fuelling the strong growth momentum with strategic investments in talent through hiring and competitive compensation revisions. While this will impact margins in the immediate term, it is expected to reduce attrition levels, and positions us well for future growth.”
Infosys’s larger IT rival Tata Consultancy Services and also smaller rivals such as HCL Technologies and Wipro have seen their margins erode as they battle a higher sector-wide talent churn and try to retain employees.
The April-June quarterly earnings reports have started on a weaker note for Indian IT services companies, with TCS, HCL Technologies and Wipro also missing their first-quarter profit estimates.
(With Reuters inputs)
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