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Published: Jan 12, 2023
Updated: Jan 12, 2023

Infosys Outshines TCS: Q3 Net Profit Soars 13% to Beat Market Expectations

Strong Results

Infosys, India's second-largest information technology (IT) services company, has reported strong financial results for its Q3, outperforming its largest rival TCS, which missed market estimates. The company's net profit for the quarter came in at ₹6,586 crore ($905 million), a 13% increase YoY, beating analysts' expectations. The company's revenue also beat market estimates, coming in at ₹38,318 crore ($5.3 billion), a 20.2% increase YoY.

TCS ,the major rival misses out on targets

In comparison, TCS, the largest IT company in India, missed market estimates with its Q3 net profit coming in at ₹8,701 crore ($1.2 billion), a 2.1% increase YoY. The company's revenue also missed estimates, coming in at ₹40,135 crore ($5.5 billion), a 3.2% increase YoY.

Deals and Guidance:

Infosys's strong financial performance was driven by a continued focus on digital services, which accounted for more than 60% of the company's revenue. Large deal total contract value (TCV) for the quarter was also strong, coming in at $3.3 billion, the strongest in the last 8 quarters.

Operating Margins decline despite other strong factors

Despite the positive financial results, operating margins did see a slight decline, coming in at 21.5% compared to 23.5% in the same period last year. The company's LTM IT Services Attrition also decreased to 24.3% from 27.1% in the September quarter and 25.5% in Q3.

Despite the changing global conditions, Infosys has increased its revenue guidance to 16-16.5% from earlier 15-16%. The company's margin guidance remains unchanged at 21-22%.

Good performance amidst global uncertainties

In conclusion, Infosys has outperformed its largest rival TCS, reporting strong financial results for Q3, with net profit and revenue both beating market expectations. The company's focus on digital services and strong large deal TCV were key drivers of the performance. Despite a slight decline in operating margins, the company's guidance for the rest of the year remains positive. This performance highlights the company's ability to adapt and execute its strategy successfully despite the global economic uncertainty. Infosys continues to be a reliable partner for its clients and investors, delivering sustainable growth and value