Buzz Update Infosys has recorded the fastest growth in a decade; Cause for concern TOU

Buzz Update  Infosys has recorded the fastest growth in a decade;  Cause for concern

 TOU

Infosys has recorded the fastest growth in a decade; Cause for concern

Infosys, India’s second-largest IT services company, reported revenue of Y 1,21,641 crore ($ 16.31 billion) in FY22, registering a sharp growth of 19.7 per cent in stable currency over the previous financial year, a decade-long growth.

Net profit was ₹ 22,110 crore ($ 2.963 billion), up 13.4 per cent year-on-year. The company forecasts a traditional revenue growth rate of 13-15 per cent for FY23 and 21-23 per cent for operating margins.

Commenting on the results, CEO and MD Salil Parekh said: “Infosys has delivered the highest annual growth in a decade with broad-based performance driven by deeply diverse digital and Infosys cobalt-led cloud capabilities. We continue to gain market share.

Impact of the Ukraine War

Stating that there would be no physical impact on businesses due to the ongoing Russia-Ukraine conflict, he said, “Russia has less than 100 employees who support global clients” and there is no domestic business in that market.

Parekh also declined to comment on the plight of Akshata Murthy, daughter of Infosys co-founder Narayana Murthy and wife of UK Chancellor of Exchequer Rishi Sunak. 7,000 crores. Murthy has recently come under fire from political rivals for his tax status in the UK and his stake in Infosys.

“With the strong demand environment ahead, we look forward to making appropriate long-term investments in capacity building in sales, delivery and innovation. However, we plan to neutralize some of the impact through aggressive cost optimization programs and value-added pricing based on service and brand differentiation. This, along with the normalization of post-pandemic costs, is reflected in the margin guidance, ”said CFO Nilanjan Roy.

Spike in Attrition

The company said it was addressing a sharp rise in attrition through a variety of measures, including hiring more freshers off-campus. Q4 is on a declining trend as of FY22, with CFO Parekh saying: “We will scale global talent, invest in employees and accelerate innovation and digital capabilities to harness the expanding market opportunity.”

Infosys ADR traded down nearly 6 per cent on the Nasdaq, and analysts expect Indian markets to respond similarly on Thursday.

Published

April 13, 2022

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