Infosys Q2 results have been announced for FY25, and the company has reported steady performance driven by broad-based growth. The company posted revenues of $4,894 million for the quarter ended 30 September 2024, reflecting a sequential growth of 3.1% and a year-on-year (YoY) growth of 3.3% in constant currency (CC) terms.
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“We had strong growth of 3.1% quarter-on-quarter in constant current in Q2. 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”, said Salil Parekh, CEO and MD. “Our large deals at $2.4 billion in Q2 reflect our differentiated position. I am grateful to our employees for their unwavering commitment to our client as we further strengthen our market leadership” he added.
Key Financial Highlights of Infosys Q2 Results
Revenue Growth: Infosys delivered a 3.1% quarter-on-quarter (QoQ) growth and a 3.3% YoY growth in CC terms, underlining the company’s ability to maintain its growth trajectory despite global economic uncertainties.
Reported Revenues: The reported revenues for Q2 FY25 stood at 40,986 crore, representing a 5.1% growth YoY.
Operating Margin: The company maintained a stable operating margin of 21.1%, though slightly down by 0.1% YoY and flat compared to the previous quarter.
Earnings Per Share (EPS): Basic EPS for Q2 FY25 came in at Rs 15.71, marking a 4.7% increase YoY.
Free Cash Flow (FCF): Infosys generated $839 million in free cash flow during the quarter, reflecting a robust YoY growth of 25.2%. In rupee terms, FCF stood at Rs 7,010 crore, up 26.6% YoY. The company achieved a high FCF conversion rate of 107.6% of net profit.
Infosys secured total contract value (TCV) of $2.4 billion in large deals during Q2, with 41% of the contracts coming from net new deals. This highlights the company’s strength in acquiring new clients while also expanding its existing relationships.
First Half (H1) FY25 Performance:
Revenue Growth: For the six months ending September 30, 2024, Infosys reported a 2.9% YoY growth in CC terms. The reported revenues for H1 FY25 reached Rs 80,300 crore, growing by 4.4% YoY.
Operating Margin: The operating margin for H1 FY25 remained steady at 21.1%, with a marginal improvement of 0.1% YoY.
Basic EPS: H1 basic EPS stood at Rs 31.09, reflecting a 5.8% growth YoY.
FCF: Infosys generated Rs 16,165 crore in FCF during H1, with a growth of 43.2% YoY, and an impressive FCF conversion of 125.4% of net profit.
“We continue to focus on accelerating revenue growth with a sharp focus on margin performance. Operating margins for the quarter was at 21.1%, driven by continued benefits from value-based pricing and utilization despite higher employee payouts. Our focus on cash generation resulted in another quarter of over 100% Free Cash Flow conversion to net profits” said Jayesh Sanghrajka, CFO. “The Board announced an interim dividend of Rs 21 per share, 16.7% increase from last year” he added
FY25 Guidance Revised
Infosys has revised its FY25 revenue growth guidance to a range of 3.75%-4.50% in constant currency terms, indicating cautious optimism about the growth trajectory for the remainder of the year. The company also retained its operating margin guidance at 20%-22%, signaling a focus on maintaining profitability amid global market uncertainties.
Infosys has demonstrated resilience with strong Q2 FY25 results, driven by broad-based growth across verticals, stable operating margins, and robust free cash flow generation. The updated revenue guidance for FY25, along with retained margin expectations, indicates a steady outlook for the company as it navigates macroeconomic challenges and continues to capitalize on digital transformation opportunities globally.
