Infosys posts 30% rise in Q4 net; operating margin drops

Company slashes revenue guidance; Headcount falls

TECH BELLWETHER Infosys Ltd has reported a 30 per cent rise in net profit at Rs 7,969 crore for the quarter ended March 2024 (Q4) as against Rs 6,128 crore in the same period of last year even as operating margin declined marginally. The company posted revenues of Rs 37,923 crore, showing a growth of 1.3 per cent from Rs 37,441 crore a year ago. Operating margin at 20.1 per cent showed a decline of 0.9 per cent on a yearon-year basis and 0.4 per cent from the December quarter.

Infosys also slashed its revenue growth forecast for FY25 by 1-3 per cent from 4-7 per cent a year ago, highlighting that discretionary spending by clients continues to remain weak. The company’s American Depository Receiptsfell7percentonthenew York Stock Exchange.

Theboardofthecompanyrecommended a final dividend of Rs 20 per equity share for the financial year ended March 31, 2024 andanadditionalspecialdividend

of Rs 8 per equity share.

“Freecashflowof$848million in Q4 was highest in the last 11 quarters driven by our relentless focus to improve working capital cycle. Consistent with the objective of giving high and predictable returnstoshareholders,theboard has approved the capital allocation policy under which the companyexpectstoreturn85percent overthenext5yearsandprogressively increase annual Dividend Pershare,”saidjayeshsanghrajka, CFO. For FY 2024, Infosys posted a net profit of Rs 26,233 crore (Rs 24,095crore),ariseof8.9percent, and a revenue of Rs 153,670 crore (Rs 146,767 crore), a growth of 4.7 per cent. Effective from FY 2025, the company expects to continue its policy of returning approximately85percentofthefreecash flow cumulatively over a 5-year period through a combination of semi-annual dividends or share buyback/ special dividends subject to applicable laws and requisite approvals, it said.

Meanwhile,thecompanysaw a YOY fall in its headcount in FY24 for the first time since 2001. As of March 31, the company’s total workforcestoodat317,240,marking a decrease of 25,994 employees compared to fiscal 2023. This is a significant contradiction from the previous year, where the company had added 29,219 employees and is even steeper compared to the net 54,396 employees in financial year 2022. Headcount fell by 5,423 employees in the March quarter.