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Thursday 14 January 2021

Infosys raises full year guidance again

LogoInfosys continues to impress with yet another strong quarterly performance. Revenue for Q321 (the three months ending 31st December) rose to $3.52b, up 5.3% sequentially and 6.6% yoy on a constant currency basis. Operating margin was unchanged qoq at 25.4%, a 350 bps improvement over the same period in the previous year.

Sales of digital services, which surpassed 50% of the company’s total quarterly turnover for the first time in Q321, continued to gather momentum increasing by 12.3% qoq and a hefty 31.3% yoy. Large deal Total Contract Value was also at an all-time high for Infosys this last quarter both coming in at $7.13b and accounting for 73% of net new business.

From and industry vertical perspective only the Manufacturing sector failed to return to yoy growth. Hi-Tech was once again the star of the Q3 show with revenues up over 17%. Financial Services and Life Sciences also had strong quarters seeing sales increase by 12% and 11% respectively.

All of the company’s geographic regions delivered yoy improvements in Q321 turnover. North American revenues, which account over for three fifths of Infosys global activities, surged ahead increasing by 8.8% yoy.  European demand, however, again proved to be least resilient to the continuing impacts of the pandemic. Sales in this territory were up by just 1.3% over the same period in the prior year.

Infosys now expects that FY21 revenue growth will be in the range of 4.5%-5% in constant currency, up from the 2%-3% view provided in October (see here). An increase in turnover of this order would be pretty good in a normal year. If delivered against the backdrop of the COVID-19 pandemic, the company’s projected yoy top line improvement will represent a noteworthy achievement.

Posted by: Duncan Aitchison

Tags: results   offshore   systemsintegration   IPP  

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