Infosys: High Quality Growth of 1.5% Year-on-year (constant Currency) With Expanded Operating Margin at 22.7%

Infosys: High Quality Growth of 1.5% Year-on-year (constant Currency) With Expanded Operating Margin at 22.7%

PR Newswire

BENGALURU, India, July 15, 2020

BENGALURU, India, July 15, 2020 /PRNewswire/ --

"Our Q1 results, especially growth, are a clear testimony to the relevance of our service offerings and deep understanding of clients' business priorities which is resonating with them in these times. It also demonstrates the remarkable dedication of our employees and leadership during this period," said Salil Parekh, CEO and MD. "Our confidence and visibility for the rest of the year is improving driven by our Q1 performance and large deal wins."

 

Infosys

 

25.5% YoY


1.5% YoY


22.7%


$1.74bn


Digital CC growth


CC growth


Operating margin


Large deal signings


 

1.  Financial Highlights - Consolidated results under International Financial Reporting Standards (IFRS)

For the quarter ended June 30, 2020

Revenues were $3,121 million, decline of 0.3% YoY and 2.4% QoQ

Operating profit was $708 million, growth of 10.1% YoY and 4.9% QoQ. Operating margin was 22.7%

Basic EPS was $0.13, growth of 3.8% YoY and decline of 5.4% QoQ

"During the last few months, we took multiple steps aimed at employee safety and well-being while providing seamless services to our clients. Clients have recognized us for the speed, security and effectiveness of our remote enablement efforts", said Pravin Rao, COO. "The strength and diversity of our portfolio was evident in good revenue performance, sizeable large deal wins, high focus on operating metrics and significant decline in attrition."

"Operating margin expanded to 22.7% driven by preemptive deployment of our strategic cost levers along with tactical opportunities triggered by the COVID situation", said Nilanjan Roy, CFO. "Collections were robust and capex was focused, which led to 50% year on year increase in Free Cash Flows. Our liquid and debt free Balance Sheet is a huge source of strength in these times."

2.  Board changes

The Board, based on the recommendation of the Nomination and Remuneration Committee, appointed Bobby Parikh as an additional and Independent Director of the Company effective July 15, 2020 for a period of 3 years, subject to the approval of the shareholders.

3.  Client wins & Testimonials

4.  Recognitions

About Infosys

Infosys is a global leader in next-generation digital services and consulting. We enable clients in 46 countries to navigate their digital transformation. With nearly four decades of experience in managing the systems and workings of global enterprises, we expertly steer our clients through their digital journey. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with agile digital at scale to deliver unprecedented levels of performance and customer delight. Our always-on learning agenda drives their continuous improvement through building and transferring digital skills, expertise, and ideas from our innovation ecosystem.

Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise navigate your next.

Safe Harbor

Certain statements in this release concerning our future growth prospects, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2020. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.

 

Infosys Limited and subsidiaries
Extracted from the condensed consolidated Balance Sheet under IFRS as at:

(Dollars in millions)





June 30, 2020

March 31, 2020

ASSETS



Current assets



Cash and cash equivalents

2,515

2,465

Earmarked bank balance for dividend (3)

536

-

Current investments

371

615

Trade receivables

2,487

2,443

Unbilled revenue

949

941

Other Current assets (4)

865

748

Total current assets

7,723

7,212

Non-current assets



Property, plant and equipment and Right-of-use assets

2,354

2,361

Goodwill and other Intangible assets

956

950

Non-current investments

853

547

Other non-current assets

1,151

1,190

Total non-current assets

5,314

5,048

Total assets

13,037

12,260

LIABILITIES AND EQUITY



Current liabilities



Trade payables

366

377

Unearned revenue

410

395

Employee benefit obligations

253

242

Other current liabilities and provisions

2,400

1,743

Total current liabilities

3,429

2,757

Non-current liabilities



Lease liabilities

512

530

Other non-current liabilities

288

272

Total non-current liabilities

800

802

Total liabilities

4,229

3,559

Total equity attributable to equity holders of the company

8,747

8,646

Non-controlling interests

61

55

Total equity

8,808

8,701

Total liabilities and equity

13,037

12,260

 

Extracted from the condensed consolidated statement of comprehensive income under IFRS for:

(Dollars in millions except per equity share data)





3 months ended
June 30, 2020

3 months ended
June 30, 2019

Revenues

3,121

3,131

Cost of sales

2,071

2,122

Gross profit

1,050

1,009

Operating expenses:



   Selling and marketing expenses

151

169

   Administrative expenses

191

198

Total operating expenses

342

367

Operating profit

708

642

Other income, net (5)

57

100

Profit before income taxes

765

742

Income tax expense 

201

196

Net profit (before minority interest)

564

546

Net profit (after minority interest)

558

546

Basic EPS ($)

0.13

0.13

Diluted EPS ($)

0.13

0.13


 

NOTES:

1. The above information is extracted from the audited condensed consolidated Balance sheet and Statement of Comprehensive Income for the quarter ended June 30, 2020 which have been taken on record at the Board meeting held on July 15, 2020.
2. A Fact Sheet providing the operating metrics of the Company can be downloaded from www.infosys.com 
3. Represents bank balance earmarked for final dividend. Payment date for dividend was July 3, 2020. 
4. Other receivables include $80 million towards redemption of mutual funds.
5. Other Income includes Finance Cost.

IFRS-INR Press Release: https://www.infosys.com/investors/reports-filings/quarterly-results/2020-2021/q1/documents/ifrs-inr-press-release.pdf

Fact Sheet: https://www.infosys.com/investors/reports-filings/quarterly-results/2020-2021/q1/documents/fact-sheet.pdf

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