Infosys reports resilient Q3 FY24 performance despite market challenges

Infosys, a global leader in next-generation digital services and consulting, reported a revenue of $4,663 million in the third quarter (Q3 FY24), marking a year-on-year and sequential decline of 1.0% in constant currency. The company’s large deal Total Contract Value (TCV) for the quarter stood at an impressive $3.2 billion, with 71% comprising net new deals. Despite a challenging economic environment, Infosys managed to maintain an operating margin of 20.5%, albeit with a sequential decline of 70 basis points. Additionally, the company saw a further decline in attrition to 12.9%.

Looking ahead, Infosys has revised its FY24 revenue guidance to 1.5%-2.0% and operating margin guidance to 20%-22%. Salil Parekh, CEO and MD of Infosys, reflected on the company’s resilience and the strength of its portfolio, which includes generative AI and cloud capabilities through Infosys Topaz and Cobalt. Nilanjan Roy, Chief Financial Officer, highlighted the operational efficiencies achieved under ‘Project Maximus’ and the robust cash generation with a Free Cash Flow (FCF) to net profit conversion for Q3 at 90.6%.

Infosys’s performance in a seasonally weak quarter was bolstered by its strong deal momentum, with a notable 71% of deals being net new. The company’s foray into generative AI has been driving differentiation and market leadership. Financially, the reported revenues stood at ₹38,821 crore, a growth of 1.3% year-on-year. The basic Earnings Per Share (EPS) saw a decline of 6.1% year-on-year, while FCF witnessed a growth of 17.0% year-on-year.