Infosys Q4 Results Review - Chasing High Tide, Focused On Execution: Prabhudas Lilladher

"NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Prabhudas Lilladher Report.Infosys Ltd. reported revenue of $4.6 billion, down 2.2% QoQ in constant currency and down 2.1% in reported terms, below consensus of 0.6% QoQ decline. With Q4 exit FY24 growth translates to 1.4% CC YoY, tad below the lower-end of the guidance band (1.5-2% YoY). The sequential decline was led by re-scoping of large deal within Financial Service vertical that created an impact of 100 bps QoQ. Even if we eliminate the one-off impact, the weakness was visible across key verticals and geographies. Despite the softness in revenue growth, deal total contract value was attractive at $4.5 billion, which translates to a full year TCV of $17.7 billion (1.0 time)..The management indicated that it hasn’t witnessed any meaningful change in the spending behavior within its client portfolio. The enterprise clients continued to reprioritise spends on critical business aspects to drive cost optimisation through AI and automation. While discretionary spends, continue to get scrutinized even more, leading to a deferral in project closures and execution challenges. The weakness in execution is evident through the slower pace of ramp up on the multiple mega deals awarded in FY24. Despite recording the highest-ever deal TCV in FY24, Infosys has given out a muted revenue guidance to the tune of 1-3% YoY CC. We believe, the conversion challenges continue to persist in FY25 on account of slowdown in dictionary spends and delay in decision-making, which might lead to further pausing or deferring programs that are non-critical to business enterprises..Although, Q4 had witnessed a dip in margin (100 bps impact attributed to large-deal re-scoping), the management is flexing on multiple levers to improve margins:improve utilisation,optimise subcon and rationalise pyramid,improve offshoring and near-shoring. Despite anticipating muted revenue growth in FY25, the management was optimistic to drive margins to an upwards trajectory and has maintained its guidance to the earlier band of 20-22%..Click on the attachment to read the full report:.Infosys Q4 Results Review - Unexpected Pain Continues, Miss Guidance Again, FY25 To Be Muted: Dolat Capital.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Infosys Q4 Results Review - Chasing High Tide, Focused On Execution: Prabhudas Lilladher

Pain continues across verticals and geographies, large deal total contract value is the only silver line

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Infosys Q4 Results Review - Chasing High Tide, Focused On Execution: Prabhudas Lilladher

Pain continues across verticals and geographies, large deal total contract value is the only silver line

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