The global leader in next-generation digital services and consulting reported revenues at Rs37,923 crore, growth of 1.3% YoY
FinTech BizNews Service
Mumbai, April 18, 2024: Infosys (NSE, BSE, NYSE: INFY), a global leader in next-generation digital services and consulting, delivered $18.6 billion in FY24 revenues with a growth of 1.4% in constant currency and operating margin of 20.7%. Free Cash Flow was strong at $2,882 million, an increase of 13.7% over FY 23. Large deal TCV for FY24 was highest ever at $17.7 billion, with 52% being net new. Q4 revenues were at $4,564 million, flat year on year and decrease of 2.2% sequentially in constant currency. Large deal TCV for the quarter was $4.5 billion, with 44% being net new. Operating margin for the quarter was 20.1%, a sequential decrease of 40 bps. Free Cash Flow was robust at $848 million.
“We delivered the highest ever large deal value in the financial year 2024. This reflects the strong trust clients have in us. Our capabilities in Generative AI continue to expand. We are working on client programs, leveraging large language models with impact across software engineering, process optimization, and customer support, said Salil Parekh, CEO and MD. “I would like to thank our 317,000 employees across the world that are working to create value for our clients.” he added.
Guidance for FY25:
• Revenue growth of 1%-3% in constant currency
• Operating margin of 20%-22%
For the quarter ended March 31, 2024
• Revenues in CC terms remained flat YoY and declined by 2.2% QoQ
• Reported revenues at Rs37,923 crore, growth of 1.3% YoY
• Operating margin at 20.1%, decline of 0.9% YoY and 0.4% QoQ
• Basic EPS at Rs19.25, increase of 30.2% YoY
• FCF at Rs7,032 crore, growth of 20.3% YoY; FCF conversion at 88.2% of net profit For year ended March 31, 2024
• Revenues in CC terms grew by 1.4% YoY
• Reported revenues at Rs153,670 crore, growth of 4.7% YoY
• Operating margin at 20.7%, decline of 0.4% YoY
• Basic EPS at Rs63.39, increase of 10.0% YoY
• FCF at Rs23,865 crore, growth of 16.7% YoY; FCF conversion at 90.9% of net profit
“Free cash flow of $848 million in Q4 was highest in the last 11 quarters driven by our relentless focus to improve working capital cycle. Consistent with the objective of giving high and predictable returns to shareholders, the Board has approved the capital allocation policy under which the company expects to return 85% over the next 5 years and progressively increase annual Dividend Per Share”, said Jayesh Sanghrajka, CFO. “Operating margin expansion in the medium-term and improving cash generation continue to remain our priorities underpinned by early success in Project Maximus”, he added.
Capital Allocation
• For the Financial Year 2024, the Board recommended a final dividend of Rs20 per share and additionally a special dividend of Rs8 per share. With this, the total payout over FY20 – FY 24 will be 85% of Free Cash Flow, in line with our capital allocation policy announced earlier.
• The Board in its meeting held on April 18, 2024 has reviewed and approved the capital allocation policy for the next 5 years from FY25 – FY29 after taking into consideration the strategic and operational cash requirements as below. “Effective from financial year 2025, the Company expects to continue its policy of returning approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi-annual dividends and/or share buyback/ special dividends subject to applicable laws and requisite approvals, if any.” Under this policy, the Company expects to progressively increase its annual Dividend Per Share (excluding special dividend if any). Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS. Dividend and buyback include applicable taxes.
Update on India Income Tax Orders
During the quarter ending March 31, 2024, the Company received orders under sections 250 and 254 of the Income Tax Act, 1961, from the Income Tax Authorities in India for the assessment years, 2007-08 to 2015-16, 2017-18 and 2018-19. These orders confirmed the Company's position with respect to tax treatment of certain contentious matters. As a result, interest income (pre-tax) of Rs1,933 crore was recognized and provision for income tax aggregating Rs525 crore was reversed with a corresponding credit to the Statement of Profit and Loss. Also, upon resolution of the disputes, an amount aggregating to Rs1,628 crore has been reduced from contingent liabilities.
Update on Financial Services Client
During Q4, we had rescoping and renegotiation of one of the large contracts in the financial services segment leading to a one-time impact of approximately 100bps in Q4. Nearly 85% of the scope of the contract continues as-is.
