INFOSYS FOR Q4FY25 REPORTED REVENUES OF US$ 4,730 MN

News: Infosys for Q4FY25 reported revenues of US$ 4,730 mn, down 3.5% QoQ/ up 4.8% YoY in CC terms. Vertical wise, in CC terms on a YoY basis growth was led by Manufacturing (16% of the mix), Financial Services (28.4% of the mix) which grew by 14%, 12.6%. Geography wise, the growth was led by India (2.9% of the mix), Europe (31.2% of the mix) which grew by 44%, and 15% respectively. Whereas, RoW (8.8% of the mix) and North America (57% of the mix) declined by 2.2% and 0.4%. EBIT margins for the quarter came at 21%, down 30 bps QoQ due to headwinds of 140 bps from compensation-related costs and 40 bps from acquisition related amortization of intangibles which were partly offset by tailwinds of 80 bps from lower wholesale customer support, 30 bps from Project Maximus, 20 bps from currency movement and 20 bps from lower third-party costs. PAT for the quarter stood at ₹7,033 crore, up 3.3% QoQ. For FY25, the company’s revenues grew 4.2% YoY in CC terms to $19,277 mn. The EBIT margin for the year stood at 21.1%, up 50 bps YoY on the back of Project Maximus led cost rationalisation. PAT for the year stood at ₹26,713 crore, up 19% YoY. The company has provided revenue guidance of 0-3% in CC terms for FY26 and maintained operating margins guidance band of 20-22% for FY26.

View: Infosys reported weak sequential revenue and margins performance in Q4, with growth impacted by lower third party revenues and seasonal weakness. The company expects steady growth in capital markets and mortgage business within Financial Services, and ER&U, while Manufacturing (auto, industrial) in Europe and Retail sectors may remain subdued due to macroeconomic challenges. The two acquisitions announced, when merged, would contribute ~40-50 bps incrementally to the topline. The management noted extended decision cycles for discretionary spending and large deals, though no project cancellations were reported. However, with a subdued FY26 outlook amid global tech spending cuts, growth visibility is sketchy. Given the company’s higher exposure to the US slowdown due to higher share of discretionary portfolio and subdued growth guidance, we maintain a cautious outlook on the company.

Impact: Negative