Infosys revises FY22 revenue guidance to 19.5-20% in CC termsINFY - 1491 Change: 25.25 (1.72 %)
News: Infosys' revenue numbers were ahead of our estimates but margins came in slightly below our estimates. Revenues increased 7% QoQ in CC terms (vs. our estimates of 4% QoQ growth) while dollar revenues increased 6.3% QoQ to US$4,250 mn . It reported EBIT margin of 23.5% (vs. our estimate of 23.7%), which was down ~10 bps QoQ . Revenue growth was across geographies & verticals, led by Europe, which grew 27.2% YoY while In terms of verticals the growth was led by BFSI, retail, communication. Margins were resilient despite (-80 bps) wage hike impact , (-40 bps) impact due to lower utilisation, which was mitigated by cost optimisation (+60bps), savings in SG& A (+40 bps) and currency tailwind of (+20 bps). Revenue guidance increased to 19.5-20% in CC terms for FY22E (from 16.5-17.5% given in Q2 and14-16% in Q1). EBIT margin guidance maintained at 22-24% for FY22E. Fresher hiring guidance increased from 45K to 55K for FY22E.
Views: Infosys has seen healthy revenue growth and a strong deal pipeline especially on the Europe region where it is seeing a good traction. Margin resilience of the company vs. TCS has been a key highlight of the quarter. However, the supply side challenges continue to push LTM attrition higher. The company expects it to stabilise in a couple of quarters. The company mentioned that clients are now open to discussing price increase amid cost pressure.