Infosys Q2 Review - Well Placed To Manage Near-Term Uncertainty: Yes Securities

While Infosys' revenue growth in Q2 FY23 was in-line, EBIT margin was above Yes Securities' estimates.

<div class="paragraphs"><p>Infosys campus in Bengaluru. (Photo: Vijay Sartape/BQ Prime)</p></div>
Infosys campus in Bengaluru. (Photo: Vijay Sartape/BQ Prime)

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Yes Securities Report

Infosys Ltd. reported strong financial performance for the quarter. While, the revenue growth was inline, Ebit margin came in above estimates. It reported constant currency growth of 4.0% QoQ, led by manufacturing (up 45% YoY in CC terms) and energy and utilities (up 24.3% YoY in CC terms).

The Indian rupee reported growth of 6% QoQ was supported by depreciation of Indian rupee by 3.4% QoQ versus U.S. dollar.

There was sequential improvement in Infosys' Ebit margin (up 149 bps QoQ) led by improving pyramid, better realisation and other efficiency measures. There was slight moderation in employee attrition as last twelve months attrition was down 130 bps QoQ to 27.1%.

The multiyear tech adoption cycle broadly remains intact led by adoption of cloud and data analytics. However, the clients have become cautious regarding the evolving macroeconomic situation and there are signs of slowdown in discretionary spending in sectors such as hi-tech, retail, logistics etc. and can lead to near term moderation in revenue growth.

Employee attrition has started moderating and should support operating margin going ahead.

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Yes Securities Infosys Q2FY23 Results Review.pdf


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