Newsletter
Before we get into the numbers, Infosys announced a major leadership change. The company has named Ashiss Kumar Dash as its CEO-designate as new CEO, succeeding current CEO Salil Parekh.
Now, onto the quarterly results.
The numbers: net profit up 12.3% at ₹7,769 crore vs ₹6,921 crore (YoY). Down 8.6% vs ₹8,501 crore (QoQ).
Revenue up 14% at ₹48,211 crore vs ₹42,279 crore (YoY). Up 3.9% vs ₹46,402 crore (QoQ).
EBIT margin at 21.1%, up 0.3 percentage points YoY and 0.1 percentage points QoQ.
In constant currency (CC) terms, revenue grew 2.4% YoY and 1% QoQ.
Infosys earns in foreign currencies like the US dollar. Constant currency removes the impact of changing exchange rates to show the company's real business growth.
Revenue by business and geography: among business segments, life sciences was the biggest winner with 24% YoY growth in constant currency.
Financial services and hi-tech both grew 2.4%, while energy, utilities, resources & services and communication grew 1.3% each. The retail business remained weak, with revenue declining 1.8%.
Across geographies, North America remained the biggest growth driver with 3.2% YoY growth, followed by Europe at 2.8%. Revenue from India fell 4.2%, while the rest of the world declined 1.6%.
CEO Salil Parekh said the modest quarterly growth was partly impacted by a one-time client decision during the quarter.
Large deals keep coming: Infosys signed $3.6 billion worth of large deals during Q1FY27, up from $3.2 billion in the previous quarter.
According to Salil Parekh, demand for the company's AI platform, Infosys Topaz, is helping convert AI projects into actual business and driving more large deal wins.
Attrition stays under control: Infosys ended the quarter with 3,28,062 employees, down by just 52 employees from the previous quarter.
The company's voluntary attrition rate stood at 13%, compared to 12.6% in the previous quarter.
Attrition tells us how many employees are leaving on their own. Lower attrition is generally a positive sign because companies spend less on hiring and training replacements while retaining experienced talent.
Guidance gets a small trim: Infosys slightly lowered its FY27 revenue growth guidance to 1.5-3% in constant currency from the earlier 1.5-3.5% range. However, it maintained its operating margin guidance of 20-22%.
Overall, the guidance is slightly weaker than before. While the lower end remains unchanged, trimming the upper end suggests the company expects demand to stay cautious over the rest of the year.
Comparison: Infosys reported 1% sequential constant currency revenue growth, which came in below analysts' expectations of 1.8%.
Among India's large IT companies, it performed better than TCS (+0.4%), HCLTech (-0.5%) and Wipro (-1.2%), but lagged Tech Mahindra, which posted 2.6% growth during the quarter.
After the results, Infosys' American Depository Receipt (ADR) fell nearly 5% in pre-market trading in New York.
An ADR is a way for US investors to buy shares of foreign companies like Infosys on American stock exchanges.
