Daimler Deal Helped Infosys Achieve Strong Q2 Earnings Growth

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Daimler Deal Helped Infosys Achieve Strong Q2 Earnings Growth
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Tata Consultancy Services Ltd. (NS: TCS )’ unsatisfactory earnings results released on Friday cast no effect on investors’ expectations prior to Infosys’ quarterly earnings announcement scheduled on October 13, 2021, as the IT giant’s scrip closed at Rs 1,709.20 (1.43% higher) on NSE on Wednesday, bolstered by high investors’ expectations.

In all justice, the country's second-largest software exporter, Bengaluru-based Infosys (NS: INFY ) reported a consolidated net profit at Rs 5,421 crore for the quarter ending September 2021, which is an 11.9% rise year-on-year.

The figure was Rs 4,845 crore for Q2 FY21 and the net profit has risen by 4.4% compared to Rs 5,195 crore recorded in the quarter ending June 2021.

The rise in net profit in Q2 compared to the last quarter can be attributed to factors such as strong revenue contribution from the Daimler deal, increasing reliance of clients on digital practices, increasing growth across all verticals, and strong seasonality.

The IT major’s consolidated revenue for the given quarter was recorded at Rs 29,602 crore, a sequential growth of 6.1% compared to the previous quarter’s figure at Rs 27,896 crore, and 20.5% when compared to the reported revenue of Rs 24,570 crore for Q2 FY21.

The numbers depicted strong growth despite a significant decline in other income, which was negative 15.8% sequentially and 8% year-on-year.

The CEO and MD of Infosys, Salil Parekh stated that given the ongoing momentum of the company’s growth, they have revised their revenue guidance from 14-16% in July to now 16.5% to 17.5%, while the company’s margin forecast remained the same at 22% to 24% for FY22.

Infosys signed massive deals to the tune of $2.15 billion in the second quarter of FY22, compared to $2.6 billion in Q1. 

“Cash generation remained robust. We have executed the capital allocation policy with the successful closure of share buyback and step up in interim dividend to 15 per share”, added Parekh.

Additionally, despite an increase in the employee cost retained by the company at 3.4% sequentially and 17.5% YoY, Infosys’ attrition rate grew to 20.1% sequentially from 13.1%.

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