Infosys cuts FY24 forecast, misses Q1 profit estimates

Infosys Ltd on Thursday reported its weakest June quarter revenue growth since FY21 and slashed its annual sales forecast for the current fiscal year.

- Shouvik Das

The Bengaluru-based tech bellwether said that in constant currency terms, which does not account for currency fluctuations, revenue rose 1% from the preceding quarter and 4.2% from the year earlier to touch ₹37,933 crore. Net profit rose 10.9% from a year earlier to ₹5,945 crore, while operating margin came in at 20.8%, in line with its guidance of 20-22% for the fiscal.

Analysts surveyed by Bloomberg estimated a June quarter profit of ₹6,245 crore on revenue of ₹37,843 crore. An investor note from 29 June by broking firm ICICI Securities had projected revenue growth of 0.8% during the period.

Infosys has also revised its FY24 revenue growth guidance to 1-3.5%, down from 4-7% given at its FY23 earnings conference on 13 April, Salil Parekh, the chief executive of Infosys, said at a conference after the earnings announcement. “Even as we won two mega deals recently, we maintain a pipeline of strong large and mega deals. We see revenue from several of these towards the later part of FY24. Keeping that in mind, we’re changing guidance this fiscal year to 1-3.5% in constant currency. We have launched a broad, comprehensive margin expansion programme, which will work across five areas—pyramid efficiency, automation, improvement in critical portfolios, reducing indirect cost, and communicating and deriving value across our portfolio. We have an ambition to improve our operating margin in the future period."