Infosys ends FY22 with an 11-year record high, expects momentum to sustain

Infosys yesterday reported revenues increased by nearly 20 percent last fiscal year, the highest growth since the fiscal year 2010-11, and forecast growth of between 13 percent and 15 percent for the year that started this month. The rate at which people are leaving and switching jobs remains the biggest concern at a time of strong demand in the $227 billion IT services industry. Notes: Infosys yesterday reported revenues increased by nearly 20 percent last fiscal year, the highest growth in 11 years, and forecast growth of between 13 percent and 15 percent for the year that started this month. Revenues touched $16.3 billion for the year ended March 31, 2022, which was a 19.7 percent increase in constant currency, matching the 19.5-20 percent range the company had forecast in January. Earnings per share increased 14.3 percent and free cash flow was more than $3 billion at the end of the year. “We’ve had an exceptional year … we are gaining market share, we’re building on our leadership in cloud and digital, and we’re working more closely with clients on their transformation programmes,” CEO Salil Parekh told reporters at a press conference in Bengaluru yesterday. Revenues from services related to digital technologies now account for almost 60 percent of Infosys’s sales, and sales of digital tech services grew by more than 41 percent in FY22. And within digital, cloud services are growing faster. The company’s suite of cloud-based services, called Cobalt, is seeing strong traction, Parekh added. Infosys’s sales for the fiscal fourth quarter were at $4.28 billion, which was a 20.6 percent increase over the year-earlier period and a 1.2 percent increase on the December quarter. The sequential increase missed analysts’ expectations of about 2-2.8 percent growth, owing to a one-off cutback from a large client. Infosys, India’s second-biggest software services provider, ended the year with $9.5 billion in the total contract value of large orders — meaning those that are each worth $50 million or more over the life of the contract. TCV for Q4 was $2.3 billion. Larger rival TCS reported on April 11 that its revenues for the year ended March 31, 2022, rose $3.53 billion, the biggest incremental increase in the company’s history, to touch $25.7 billion, a 15.4 percent increase over the previous fiscal year, in constant currency. The high rate at which employees are leaving and switching jobs is the biggest concern in the IT services industry today. Infosys has one of the highest rates of this churn, among the top IT providers from India. Attrition at the company kicked up to 27.7 percent at the end of Q4 from 25.5 percent at the end of December. It was only about 11 percent a year ago when uncertainties due to the Covid pandemic were still high. Today, as the world’s biggest markets return to growth, demand for talent in the IT sector has soared, and churn has surged. The increase in the rate of attrition is also due to how it is calculated, in terms of the 12 months including the reporting period. The rate has begun to come down in more recent months, Infosys CFO Nilanjan Roy told reporters yesterday. The company hired 85,000 people in FY22, including 22,000 in Q4, with a net addition of 54,396 over the year, to end with 314,015 employees as of March 31, 2022. Infosys is starting the current year with a target of 50,000 recruits. Third-ranked HCL Technologies reports its earnings on April 21 and Wipro, the fourth-biggest Indian IT vendor, will report its earnings on April 29. Infosys press release https://shrtm.nu/U0FP Theme music courtesy Free Music & Sounds: https://soundcloud.com/freemusicandsounds