What is your quick take on the quarterly results of Infosys?

It was hardly surprising that Infosys stock did face some pressure on Monday as the profits despite showing positive growth were below street expectations. The Q1 results for Infosys did manage to beat the revenue estimates but lagged on the profit growth and the operating margin front. This was largely on account of higher manpower costs amidst rising pay packages, greater competition for qualified talent and rising levels of attrition in the IT industry, with all the major IT companies reporting record levels of attrition in Q1FY23.

Let me turn to the actual numbers of Infosys for the June 2022 quarter. The net profit for Q1FY23 which came in at Rs5,360 crore was up 3.2% on a yoy basis but ended up lower by 5.7% on a sequential basis compared to the March 2022 quarter. The good news is that Infosys has upped its revenue growth guidance for FY23 by a full 100 bps, Effectively, the revenue guidance has been raised from the range of 13-15% to the new range of 14%-16%.

However, the picture was a lot more encouraging on the top line revenue front. For Q1FY23, the sales revenues of Infosys were up 23.6% yoy at Rs34,470 crore. What is more, even the sequential revenues were up 5.5% compared to March 2022. However, the operating profit margins (OPM) fell from the recently stabilized range of 21%-23% to a much lower level of 20.1% in the Q1FY23 quarter. Unlike TCS, which saw a lot of revenue growth pressure from its UK business, Infosys saw robust revenue growth in the US and the UK.