HomeInvestingEarningsInfosys logs in disappointing set of numbers for Q4

Infosys logs in disappointing set of numbers for Q4

Infosys reported a poor set of figures for the third quarter, with the effect of the present IT stress and adverse macroeconomic environment showing in the company’s numbers, missing not just expectations but also its own projection on revenue growth for the year.

Although the IT behemoth had confirmed sales growth projections in constant currency of 16–16.5 percent at the conclusion of the previous quarter, it ended the year with 15.4 percent revenue growth. The revenue for the quarter dipped 2.2 percent in reported dollars and 3.2 percent in constant currency terms, totaling $4,554 million.

Infosys also had a one-time impact on revenue, according to the leadership. “During the quarter we saw unplanned project rampdowns in some of our clients and delays in decision making which resulted in lower volumes. In addition, we had some one-time revenue impact,” Chief Executive Officer Salil Parekh said.

According to Chief Financial Officer Nilanjan Roy, this one-time revenue hit was related to volume, but it was also “a mix of cancellations and individual customer concerns.”

The company’s EBIT margins were 21 percent for the year, which was at the lower end of its target range of 21 to 22 percent. It also fell from 21.5 percent in the previous quarter.

The company’s future outlook for FY24 has also been lower than expected. It has forecasted 4–7 percent sales growth for the year, with an operating margin of 20–22 percent.

The last time the company’s revenue was in this area was in FY18, when it reported a 5.8 percent sales increase.

According to Parekh, the business had some unforeseen project rampdowns with certain customers, as well as delays in decision-making, resulting in decreased volumes.

“Some of the clients that decided to slow down or stop some of the projects. These were things we had not seen at the start or end of last quarter. And that’s what we felt. We’ve also seen some of that stabilizing in March, but the demand environment is uncertain. We are making sure that we keep that in mind as we look ahead and remain agile as we look ahead,” Parekh told the press.

He told Moneycontrol that, although there is a huge transaction pipeline, the cycle of concluding agreements is slowing.

Asked on the numbers posted by the company, Parekh said, “In some places, we saw a one time impact with clients. Those were things we saw during the quarter. The demand or market environment changed and that is what caused us to have the outcome that we had in Q4.”

In terms of verticals, Parekh saw weakness in high-tech, retail, and telecommunications, as well as financial services such as asset management, investment banking, and mortgage.

Last quarter, he predicted a slowdown in mortgage and investment banking, as well as telecom, high-tech, and retail.

Infosys’ fourth quarter is often a bad one.

The company’s major transaction total contract value (TCV) was $3.3 billion in the third quarter and $2.1 billion in the fourth quarter. It had a TCV of $2.3 billion in the same time period last year.

The company’s major transaction TCV was $9.5 billion in FY22 and climbed slightly to $9.8 billion in FY23.

The financial crisis was predicted to have an impact on the performance of IT firms. The first three months of the year were characterised by global financial contagion as a result of the failure of many regional banks located in the United States, including Silicon Valley Bank (SVB), Signature Bank, and Credit Suisse. This exacerbated the IT industry’s already-existing difficulties with macroeconomic problems. According to JP Morgan research, TCS and Infosys have the biggest SVB and US regional banking exposure.

When TCS presented its results on April 12, it struck a negative tone, stating that the quarter was lower than projected and that the business experienced instability in the financial sector.

News Desk
News Deskhttps://businessheadline.in
Business Headline aims at providing you with all the insights around the business world along with creative write-ups and reviews by renowned global personalities. Additionally the Business Blog will help startups and enterprises to develop their business.
- Advertisment -

CRICKET SCORE LIVE

- Advertisment -

Most Popular

error: