Infosys Ltd. Q4FY23 Result First Cut - A miss on all fronts

Mr. Manish Chowdhury, Head of Research at Stoxbox

- Revenue fell 2.3% QoQ/ up 13.8% YoY in INR terms to Rs. 37,441 crores, missing market estimates of Rs. 38,854 crores. The FY23 guidance of 16.0%-17.0% revenue growth was also a miss as it came in at 15.4%.

- EBIT dropped 4.4% QoQ/ up 13.2% YoY to Rs. 7,877 crores, below market expectations of Rs. 8,402 crores and EBIT margin was reported at 21.0% (down 50 bps QoQ/ down 10 bps YoY).

- Net income was reported at Rs. 6,128 crores (down 6.9% QoQ/ down 7% YoY), missing market estimates of Rs. 6,611 crores. The PAT margin came at 16.4% (down 80 bps QoQ/ down 90 bps YoY), lower than market estimates of 17%.

- Voluntary attrition stood at 20.9% in Q4FY23 compared to 24.3% in Q3FY23.

- Large deal TCV for Q4FY23 came at US$ 2.1 billion and stood at US$ 9.8 billion for FY23.

- The board of directors recommended a final dividend of Rs. 17.5 per equity share.

- Infosys reported a workforce of 343,234 employees as on March 31, 2023, with a net reduction of 3,611 employees in Q4FY23 and an addition of 29,219 employees in FY23.

- The company guided for a revenue growth of 4.0%- 7.0% in FY24 along with an EBIT margin guidance of 20.0%- 22.0%.

View: Infosys reported a single digit de-growth in revenue for Q4FY23 due to unplanned ramp downs in their BFSI, Hi-tech, Retail and Telecommunication verticals and a one-time impact event which led to significant slowdown in volume. The FY23 revenue guidance miss along with sub-par FY24 guidance clearly shows that the global weak macroeconomic environment is weighing on the company's performance, with discretionary projects taking a backseat and decision-making cycle becoming longer. It would be interesting to see how the company steers through this difficult phase, especially against the backdrop of the demand weakening becoming more broad-based across business verticals.

Shares of Infosys Limited was last trading in BSE at Rs. 1388.60 as compared to the previous close of Rs. 1428.45. The total number of shares traded during the day was 609878 in over 44382 trades.

The stock hit an intraday high of Rs. 1413.00 and intraday low of 1383.60. The net turnover during the day was Rs. 850053027.00.

Source : Equity Bulls

Keywords

Infosys INE009A01021 INFY Q4FY23 FY2023 ResultFirstCut Stoxbox