Q3 results: Infosys beats market expectation as net profit rises 11.4%
Infosys gave a positive commentary on the future outlook and also increased the revenue guidance for the fiscal year.
Infosys, India’s second-largest technology services company, posted an upbeat performance for the October to December 2024 quarter, beating market expectations, as the net profit rose by 11.4% year-on-year.
The IT giant posted a strong Q3 performance despite this period generally being considered a weak season with a longer holiday period and lower business activity.
The net profit for the third quarter of FY25 totalled Rs 6,806 crore. The revenues during this period stood at Rs 41,764 crore, registering an annual growth of 7.6%.
On the company's performance, Infosys CEO Salil Parekh remarked that there has been an uptick in spending on technology especially from the financial services segment. This segment is the largest contributor to its revenues.
The CEO further said the company has seen signs of higher spending on technology from the financial services segment in Europe besides improvement from the retail and consumer goods segment.
These developments led the company to increase its revenue guidance for FY25 to 4.5-5% from the earlier level of 3.75-4.5%.
The operating profit margin of Infosys for the third quarter of the fiscal stood at 21.2%—a 0.3% annual increase. Infosys said the total contract value of large deal wins was $2.5 billion.
Infosys CFO Jayesh Sanghrajka said, “Our structured approach to operating margin expansion yielded more results in Q3, particularly due to benefits from improving realisation and scale benefits.”
In the third quarter, Infosys registered better growth both from the industry segments and geographies. The financial services segment recorded 5.8 percent annual growth while it was 10 percent from manufacturing. The North America geography, which accounts for 59 percent of its revenue, grew by 4.9 percent on a year-on-year basis and it was 11.9 percent from Europe.
“Our strong revenue growth sequentially in a seasonally weak quarter and broad-based year on year growth, along with robust operating parameters and margins, is a clear reflection of the success of our differentiated digital offerings, market positioning, and key strategic initiatives,” said Infosys CEO.
This was also reflected in the hiring trends for Infosys which added 5591 employees in the third quarter when compared to the second quarter of the fiscal. The employee strength at Infosys now stands at 323,379.
The company said it would be hiring around 15,000 plus freshers in the current fiscal year and will hike this number to 20,000 for the next fiscal.
Infosys will roll out wage hikes for its employees starting from January this year. It also noted that its dependency on H-1B visas has reduced significantly.
Edited by Kanishk Singh