Infosys announces interim dividend, over 6 percent revenue growth in September qtr

Source :Sify
Author :Finance Desk
Last Updated: Wed, Oct 14th, 2020, 20:06:18hrs
Infosys

Bengaluru: Technology leader Infosys on Wednesday announced an interim dividend and posted its second quarter results. A notification to this regards was filed with the exchange houses.

The Infosys Board announced an interim dividend of Rs 12 per equity share.

The notification read, "Fixed October 26, 2020 as record date for interim dividend and November 11, 2020 as payment date."

For the second quarter ending September 2020, the board approved a quarterly growth of 6.1 percent and in constant currency terms approved it at 4 percent. On an annual basis, Infosys y-o-y growth is reported at 3.2 percent and 2.2 percent in constant currency terms.

Infosys had 1,487 active clients and 96 new clients were added in the quarter in consideration.

Total employees were reported at 2,40,208 in Sept quarter. This is higher from the June quarter by 975.

Revenues for the quarter were reported at $ 3,312 million.

Here are key observations as mentioned in Infosys Q2 results:

• Q2 revenues grew sequentially by 4.0% in constant currency

• Q2 revenues grew year-on-year by 3.2% in USD; grew by 2.2% in constant currency

• Q2 Digital revenues at $1,568 million (47.3% of total revenues), year-on-year growth of 25.4% in constant currency

• Q2 operating margin at 25.4%, increase of 370 basis points year-on-year

• Q2 free cash flow at $674 million; year-on-year growth of 69.8%

• Q2 net profit at $653 million, year-on-year growth of 14.7%

• Q2 voluntary attrition for IT services declined to 7.8% from 18.3% in Q2 20

• H1 revenues grew by 1.9% in constant currency

• H1 operating margin at 24.1%

• FY 21 revenue growth guidance revised upward to 2%-3% in constant currency

• FY 21 operating margin guidance revised upward to 23%-24%

CEO and MD Salil Parekh is quoted in the filing report as having said, "Our second quarter performance is a clear reflection of our ability to help clients on their digital transformation journeys. Our digital and cloud capabilities combined with intense client relevance are helping us achieve differentiated results in the market as is visible in 2.2% year on year overall revenue growth and 25.4% growth from digital offerings, which now are at 47.3% of revenues."

He added, "Increase in revenue and margin outlook for FY 21 is due to the continued trust clients have in us. I am extremely proud of our team for achieving these results in challenging business conditions globally"

In a separate news release, Infosys officials were reported congratulating the performance in the quarter.

"The strength and resilience of Infosys was fully visible in Q2 with operating metrics witnessing a healthy increase, broad-based growth, highest ever large deal TCV at $ 3.15 bn and attrition reducing to single digits," said Pravin Rao, COO. Employees have been critical part of our success. As a recognition of their stellar performance, we are giving 100% variable pay along with a special incentive for Q2. Additionally, we are rolling out salary increases and promotions across all levels effective Jan 1st.

"Our relentless efforts on cost optimization and strengthening operational efficiencies helped by certain cost deferrals led to 270 bps sequential improvement in operating margin to 25.4% and a 300 bps improvement in H1 margins," said Nilanjan Roy, CFO. Free Cash Flows grew significantly in H1 driven by our consistent focus on liquidity and cash management. Consequently, we are increasing our interim dividend per share by 50% to INR 12.

Infosys also announced extension of Mrs Sudha Murty's term as Chairperson for Infosys Foundation to December 31, 2021.

The Infosys stock on the Bombay Stock Exchange traded in the red on Wednesday (after market hours). It quoted Rs 1136.10 per share, down by 21.90 points or 1.89 percent during the trading session. The results were announced later.