Infosys: Growth acceleration accompanied by 3.7% YoY margin expansion; revenue and margin guidance increased to 2%-3% in cc and 23%-24% respectively

Infosys: Growth acceleration accompanied by 3.7% YoY margin expansion; revenue and margin guidance increased to 2%-3% in cc and 23%-24% respectively

PR Newswire

BENGALURU, India, Oct. 14, 2020

BENGALURU, India, Oct. 14, 2020 /PRNewswire/ -- "Our second quarter performance is a clear reflection of our ability to help clients on their digital transformation journeys. Our digital and cloud capabilities combined with intense client relevance are helping us achieve differentiated results in the market as is visible in 2.2% year on year overall revenue growth and 25.4% growth from digital offerings, which now are at 47.3% of revenues," said Salil Parekh, CEO and MD. "Increase in revenue and margin outlook for FY 21 is due to the continued trust clients have in us. I am extremely proud of our team for achieving these results in challenging business conditions globally."

Infosys_Logo

25.4% YoY
Digital CC growth


2.2% YoY
CC growth


25.4%
Operating margin


$3.15bn
Large deal signings


INR 12
Interim DPS,
up by 50% YoY


 

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

For the quarter ended September 30, 2020

Revenues were $3,312 million, growth of 3.2% YoY and 6.1% QoQ

Operating profit was $840 million, growth of 20.7% YoY and 18.7% QoQ

Basic EPS was $0.15, growth of 14.9% YoY and 17.0% QoQ


For six months ended September 30, 2020

Revenues were $6,433 million, growth of 1.5% YoY

Operating profit was $1,547 million, growth of 15.6% YoY

Basic EPS was $0.29, growth of 9.5% YoY

                                                                             

"The strength and resilience of Infosys was fully visible in Q2 with operating metrics witnessing a healthy increase, broad-based growth, highest ever large deal TCV at $ 3.15 bn and attrition reducing to single digits," said Pravin Rao, COO. "Employees have been critical part of our success. As a recognition of their stellar performance, we are giving 100% variable pay along with a special incentive for Q2. Additionally, we are rolling out salary increases and promotions across all levels effective Jan 1st."

"Our relentless efforts on cost optimization and strengthening operational efficiencies helped by certain cost deferrals led to 270 bps sequential improvement in operating margin to 25.4% and a 300 bps improvement in H1 margins," said Nilanjan Roy, CFO. "Free Cash Flows grew significantly in H1 driven by our consistent focus on liquidity and cash management. Consequently, we are increasing our interim dividend per share by 50% to INR 12."

2.  Client wins & Testimonials

Even amid global uncertainty across industries and the current medical situation, Infosys continued to nurture a culture of deep client relevance while building capabilities to aid them through recovery.

As global businesses navigate this tough environment, the strength of our relationships and our digital capabilities have helped us sustain the momentum to help our clients grow resilient. Here is what some of them have to say:

Awards & 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)



September 30, 2020

March 31, 2020

ASSETS 



Current assets



Cash and cash equivalents

3,038

2,465

Current investments

488

615

Trade receivables

2,430

2,443

Unbilled revenue

1,030

941

Other Current assets

785

748

Total current assets

7,771

7,212

Non-current assets



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

2,438

2,361

Goodwill and other Intangible assets

964

950

Non-current investments

1,051

547

Other non-current assets

1,139

1,190

Total non-current assets

5,592

5,048

Total assets

13,363

12,260

LIABILITIES AND EQUITY 



Current liabilities 



Trade payables

322

377

Unearned revenue

455

395

Employee benefit obligations

263

242

Other current liabilities and provisions

1,764

1,743

Total current liabilities

2,804

2,757

Non-current liabilities



Lease liabilities

551

530

Other non-current liabilities

325

272

Total non-current liabilities

876

802

Total liabilities

3,680

3,559

Total equity attributable to equity holders of the company

9,623

8,646

Non-controlling interests

60

55

Total equity

9,683

8,701

Total liabilities and equity 

13,363

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 September 30, 2020

3 months ended September 30, 2019

6 months ended September 30, 2020

6 months ended September 30, 2019

Revenues

3,312

3,210

6,433

6,340

Cost of sales

2,125

2,140

4,196

4,261

Gross profit

1,187

1,070

2,237

2,079

Operating expenses:





   Selling and marketing expenses

153

165

305

333

   Administrative expenses

194

209

385

408

Total operating expenses

347

374

690

741

Operating profit

840

696

1,547

1,338

Other income, net (3)

70

83

128

183

Profit before income taxes

910

779

1,675

1,521

Income tax expense 

255

207

456

403

Net profit (before minority interest)

655

572

1,219

1,118

Net profit (after minority interest)

653

569

1,212

1,115

Basic EPS ($)

0.15

0.13

0.29

0.26

Diluted EPS ($)

0.15

0.13

0.29

0.26

NOTES:

1.  The above information is extracted from the audited condensed consolidated Balance sheet and Statement of Comprehensive Income for the quarter and half year ended September 30, 2020 which have been taken on record at the Board meeting held on October 14, 2020.

2.  A Fact Sheet providing the operating metrics of the Company can be downloaded from www.infosys.com.

3.  Other Income includes Finance Cost.

IFRS-INR Press Release: https://www.infosys.com/investors/reports-filings/quarterly-results/2020-2021/q2/documents/ifrs-inr-press-release.pdf

Fact Sheet: https://www.infosys.com/investors/reports-filings/quarterly-results/2020-2021/q2/documents/fact-sheet.pdf

Logo: https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg

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