Indian IT giant Infosys has released its financial results for the first quarter of FY24 on 20th July 2023, showcasing positive growth despite challenges in the market. The company’s performance has been notable, with significant improvements in its attrition rate and revenue growth.
Key points:
- Infosys’ attrition rate improved by over 300 basis points, standing at 17.3 per cent in Q1 FY24.
- The company reported a 4.2 per cent YoY growth in revenue, with consolidated revenue from operations reaching ₹37,933 crores during the quarter.
- Large deals contributed to a Total Contract Value (TCV) of $2.3 billion, with a net new percentage of 56.1 per cent.
- FY24 revenue guidance was revised to 1.0-3.5 per cent, while the operating margin guidance was retained at 20-22 per cent.
- CEO Salil Parekh announced an expanded margin improvement program focusing on five key areas for sustainable growth and efficiency.
Attrition Rate and Employee Headcount
One of the key highlights of Infosys’ Q1 FY24 results is the notable improvement in the attrition rate, which has decreased by over 300 basis points, now standing at 17.3 per cent. This development indicates the company’s efforts in retaining and engaging its workforce, a crucial aspect in the highly competitive IT services industry.
Additionally, the company’s net employee headcount has marginally declined. While the total employee headcount for Q1 FY24 was 3,36,294, compared to 3,43,234 in Q4 FY23, it is essential to recognize that this strategic move could contribute to optimizing workforce efficiency and productivity.
Revenue Growth and Large Deals
Infosys demonstrated its resilience with an impressive YoY revenue growth of 4.2 per cent. During the quarter ended June, the consolidated revenue from operations amounted to ₹37,933 crores, a significant increase from ₹34,470 crore in Q1FY23 and a slight sequential rise of 1.3% from ₹37,441 crore in Q4FY23. This growth showcases the company’s ability to navigate challenges and capitalize on opportunities effectively.
The company sealed several large deals during the quarter, contributing to the Total Contract Value (TCV) of $2.3 billion, with a net new percentage of 56.1 per cent. These deals emphasize Infosys’ continued success in securing high-value projects, underscoring the confidence clients have in the company’s capabilities.
Financial Outlook
While Infosys maintains an optimistic outlook, it has revised its revenue guidance for FY24 to a range of 1.0-3.5 per cent. This revision comes amidst a challenging demand environment, reflecting the company’s commitment to providing accurate and realistic forecasts. However, it is worth mentioning that the operating margin guidance has been retained at 20-22 per cent, demonstrating the company’s efforts to maintain operational efficiency and profitability.
CEO’s Vision and Margin Improvement Program
Salil Parekh, the CEO of Infosys, expressed confidence in the company’s ability to weather challenges and capitalize on opportunities. He highlighted the expansion of a comprehensive margin improvement program that includes short, medium, and long-term strategies. These initiatives focus on five key areas, supported by Infosys’ leadership team, aiming to drive sustainable growth and operational excellence.
Conclusion
Despite a challenging market environment, Infosys has delivered encouraging Q1 FY24 results, showcasing its ability to adapt and thrive. The improved attrition rate and revenue growth underscore the company’s dedication to its employees and clients. With a revised revenue guidance and an ambitious margin improvement program, Infosys is well-positioned to tackle future uncertainties while continuing to provide innovative and reliable IT services in the global marketplace.
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