Tuesday, June 6, 2023

Infosys reported a healthy performance in 3QFY23 with revenues 0.7% above our estimates in seasonally weak quarter. However, EBIT margin came in at 21.5%, 30bps below our estimate of 21.8% while its PAT is above our estimate by 2.5%, supported by lower tax rate and healthy other income.

# Revenue grew by 2% QoQ/10% YoY in USD to US$4,659mn, 0.7% above our estimate of US$4,625mn. Sequential constant currency growth came in at 2.4% vs. our estimate of 1.3%. The growth was primarily from Energy, utility, manufacturing and Hi-tech segments and in terms of geographies, North America and Europe delivered strong growth.

# EBIT grew by 5% QoQ (up 10% YoY) to Rs82.4bn while EBIT margin stood at 21.5% (flat QoQ /down 198bps YoY), 30bps below our estimate of 21.8%, due to higher Other expenses (up 28bps YoY/21bps QoQ as a % of sales).  

# Its net income stood at Rs65.9bn (up 9% QoQ/ up 13% YoY), while net margin came in at 17.2% vs. our estimate of 16.9% due to higher non-operating income.

# LTM attrition stood at 24.3% compared to 27.1% in 2QFY23.

# New deal wins are at record high US$3.3bn as against US$2.7bn recorded in 2QFY23, which is commendable.