News

Published: Apr 15, 2023
Updated: Apr 15, 2023

Infosys Q4 Results Miss Expectations, Guidance for FY24 Modest

Infosys, one of India's largest IT firms, has reported weaker-than-expected Q4 results, with a sequential revenue decline of 3.2% on a constant-currency basis. The company's guidance for FY24 is also modest and below expectations for both revenues and margins. The unexpected decline in revenue growth and guidance has resulted in concerns about the company's outlook, leading to expectations of underperformance in the near term.

Unplanned Projects and Cancellations Impact Q4 Results

The weak results are attributed to unplanned projects and cancellations across sectors that negatively impacted revenue growth. Infosys reported a surprisingly weak set of numbers in Q4 and missed street estimates and analyst expectations on all fronts. The company's management commentary did not inspire confidence in the business outlook amid an uncertain demand environment.

Low Total Contract Value (TCV) and Large Deal Pipeline

Infosys signed a TCV of $2.1 billion in Q4 and $9.8 billion for FY23, with the TCV on a sequential basis being lower than in the previous quarter. However, the company's management stated that the large deal pipeline remained strong despite macroeconomic challenges. The management also highlighted that the company is investing in efficiency and cost to build a path to higher margins in the medium term.

Attrition Rate Drops, Employee Count Falls

Infosys reported a drop in its attrition rate to 20.9% in Q4, as compared to 24.3% in Q3. The employee count as of March 31 was 343,234, marking a drop of 3,611 from the previous quarter. The company continues to invest in its people and supporting its clients, according to Infosys President Ravi Kumar.

Uncertainty in global economic scenario could have lead to lower than expected results

Infosys' weaker-than-expected Q4 results and modest guidance for FY24 have raised concerns about the company's outlook amid an uncertain demand environment. However, the company's management has highlighted its strong large deal pipeline and investments in efficiency and cost to build a path to higher margins in the medium term. While the short- term outlook for the company may be challenging, it remains to be seen how Infosys will perform in the long term.