Infosys shares will remain in focus during this week’s trading session after the company missed analysts’ estimates for its June 2022 quarterly earnings. Infosys revenues were strong, though net profit grew marginally year-on-year, but a sequential decline impacted operating margins, which were impacted by aggressive recruitment, higher staff costs and sub-contracting expenses. Happened. Notably, Infosys has raised its FY13 revenue guidance in constant currency, while retaining its FY13 EBIT margin estimates. Investors will look at Q1 financial performance when placing their bets.
In Q1FY23, Infosys recorded a consolidated net profit of 5,360 crore, an increase of 3.2%, but a decline of 5.7% qoq as rising costs took away the winning streak of the deal in the quarter. On the other hand, revenue stood at 34,470 crore is up 23.6% year-on-year and 6.8% quarter-on-quarter. Infosys hikes its FY23 revenue guidance Up 14%-16% from the previous 13%-15% in stablecoins. While operating margin estimates were maintained at a growth rate of 21%-23%.
Mitul Shah – Head of Research, Reliance Securities said, “Infosys reported a weak performance in 1QFY23, with EBIT margin coming in at 20.1%, which is 163 basis points lower than our estimate of 20.7%. Its net income is Rs. 53.6 billion (down 6% QoQ/up 3% YoY), while adjusted net margin came in at our estimate of 15.5% versus 16.3%. Higher tax rate (tax rate increased 131 basis points to 433 basis points QoQ) also impacted its net earnings. Revenue grew 4% QoQ/18% YoY to $4,444 million in USD, 0.7% higher than our estimate of $4,411 million. Sequential constant currency growth of 5.5% versus our estimate of 3.7% I, which was impacted by cross currency headwinds. Growth was broad-based across verticals, business segments and geographies.”
By 30 June 2022, Infosys employees The number is 3,35,186 – a net addition of 21,171 to a headcount of 3,14,015 as of March 31, 2022. There is an increase of 67,233 from the total employees of 2,67,953 as on 30th June, 2021. The rate has increased to 28.4% in Q1FY23, 27.7% in Q4FY22 and 13.9% in Q1FY22.
Shah said, “EBIT increased by 1% QoQ (5% YoY) to 69.1bn, while EBIT margin was 20.1% (down 149bps QoQ/down 361bps YoY), down 63bps from our estimate of 20.7%, due to higher margins. Employee costs and sub-contract expenses. Aggressive hiring resulted in lower utilization for the quarter impacting overall operating margins.” Further, he said, although LTM attrition was 28.4% compared to 27.7% in 4QFY22, management indicated that attrition declined by 100 basis points during the quarter.
Meanwhile, in the quarter under review, Infosys’ operating margin was impacted at 20.1% — down from 3.6% from 23.7% in Q4FY22 and 1.4% from 21.5%. kept on operating profit 4.7% higher than Rs 6,914 crore 6,603 crore in Q1FY22 and down 0.6% sequentially 6,956 crore in Q4FY22.
Market reaction on Infosys shares after Q1 earnings is yet to come. Infosys shares closed on Friday last week less than 1506.30 each 26.55 or 1.73%. Infosys is the fourth largest company in India and the second largest IT firm in terms of market valuation. Currently, it has a low market capitalization 6,33,793.91 crore on BSE.
Aditi Patil, Research Associate at Prabhudas Lilladher said, Infosys (CMP: Rs 1506) is currently trading at 26x/23x the FY23/24 EPS. 57/66 with Revenue/EPS CAGR of 12%/12% over FY 2012-24E
Shah said, Infosys reported weak performance in the first quarter of FY23. Margins were lower than we expected. However, management has raised its FY23 revenue growth guidance from 13-15% to 14-16% now and maintained its EBIT margin guidance at 21-23%, indicating an outperformance during the balance of FY23’s 9M. gives a signal. Considering industry-leading double-digit revenue growth, growing share of the digital business (61% of revenue), potential improvement in EBIT margin levels from current levels and valuation comfort after stock price correction, we currently have a buy is recommended.
catch all business News, market news, today’s fresh news events and breaking news Updates on Live Mint. download mint news app To get daily market updates.