Infosys net profit rises 4.7% in Q2 FY25 as discretionary spending improves
Infosys revised its revenue guidance for FY25 higher and saw an increase in employee headcount.
Infosys, India’s second-largest technology services exporter, reported a 4.7% rise in net profit for the second quarter of FY25 and the company raised the revenue guidance for the fiscal year.
Infosys reported a net profit of Rs 6,506 crore for the second quarter of FY25 compared with Rs 6,215 crore earned a year ago. The revenue for the period amounted to Rs 40,986 crore, which was an annual increase of 5.1%.
On the performance of the company, Infosys CEO and MD Salil Parekh said, “The growth was broad-based with good momentum in financial services. This stems from our strength in industry expertise, market-leading capabilities in cloud with Cobalt and generative AI with Topaz, resulting in growing client preference to partner with us.”
Infosys has also projected an increase in revenue guidance for FY25 to 3.75-4.50%, up from the previous level of 3-4%. The company said the operating profit margin guidance for the fiscal at 20-22%.
Infosys said the total contract value (TCV) of large deals at the end of the second quarter stood at $2.4 billion. The company also declared an interim dividend of Rs 21 per share.
On the overall demand environment, Infosys CEO said the strong traction is still on deals which involve cost take-outs but added that discretionary spending, i.e. fresh spending on technology, is showing signs of improvement.
For the Indian technology industry, the increase in discretionary spending lift revenues but this segment has not shown any significant increase in the key markets of the US and Western Europe.
This was reflected in the second quarter numbers of Infosys where the retail segment was down 9.2%while BFSI showed a rise of 2.8% on an annual basis.
On the OPM front, Infosys expects to remain in the range of 20-22%. Infosys CFO Jayesh Sanghrajka said, “We continue to focus on accelerating revenue growth with a sharp focus on margin performance. Our focus on cash generation resulted in another quarter of over 100% free cash flow conversion to net profits,” added Parekh.
The big positive for Infosys in the second quarter was the increase in employees by around 2,500 people taking its total strength to 317,788. This increase comes after six quarters of decline in headcount addition.
Edited by Kanishk Singh