Infosys Q2 Results: Profit Up 5%, Rs 21 Interim Dividend

Stocks in News | Infosys, India’s second-largest software exporter, announced a strong set of financial results for the second quarter of FY25, driving its stock up nearly 3% on October 17, 2024. 

Let's take a deeper dive into the company's Q2 financial results and key highlights.

Infosys Q2FY25 Profit and Revenue Growth

Infosys reported a 5% year-on-year (YoY) increase in revenue, reaching Rs 40,986 crore for the second quarter. This growth was driven by broad-based performance across key industries, particularly financial services. 

The IT major’s net profit also rose 5%, reaching Rs 6,506 crore, up from Rs 6,212 crore in the same quarter last year.

Revised Revenue Guidance for FY25

Infosys raised its revenue growth projection for FY25 to a range of 3.75% to 4.5%, building on the 3-4% estimate announced in July. This revised forecast is largely due to the ramp-up of large deals, positioning Infosys for further success in securing high-value contracts in the coming quarters.

Operating Margins and Strong Cash Flows

Infosys' operating margins remained flat on a QoQ basis, with a slight YoY decline of 0.1%. Despite this, the company maintained strong profitability thanks to value-based pricing strategies and efficient resource management, even as employee compensation increased.

A standout performance metric was the 25.2% year-on-year increase in free cash flow (FCF), which reached $839 million. 

Infosys Announces Rs 21 Interim Dividend

Alongside the Q2 results, Infosys declared an interim dividend of Rs 21 per share. The record date for this dividend is set for October 29, 2024, with the payout scheduled for November 8, 2024. 

Previously, for FY24, Infosys had announced a final dividend of Rs 20 per share, along with a special dividend of Rs 8 and an interim dividend of Rs 18.

Mega Deal Wins and Sector Performance

Infosys secured $2.4 billion in total contract value (TCV) during Q2, with 41% of the contracts coming from net new business. 

In terms of segment performance, the financial services sector grew by 2.8% YoY, while the manufacturing and energy/utilities sectors outpaced others, growing by 12.3% and 10.9%, respectively, in constant currency. However, the retail and life sciences segments faced revenue declines.

Employee Growth and Attrition Rates

At the end of the September quarter, Infosys’ employee base rose to 317,000. However, voluntary attrition increased slightly to 12.9%, up from the June quarter. 

Conclusion: A Solid Quarter for Infosys

Infosys delivered a strong Q2 performance, with rising profits, improved cash flows, and significant deal wins. The company’s revised revenue guidance sets a positive tone for the remainder of FY25. 

Investors will also benefit from the Rs 21 interim dividend, further enhancing shareholder value. As Infosys continues to leverage opportunities in high-growth sectors, it remains a solid contender in the global IT services market.

Key Takeaways from Infosys Q2 Results

• 5% YoY increase in net profit, reaching Rs 6,506 crore
• Revised FY25 revenue growth guidance to 3.75%-4.5%
• $2.4 billion in total contract value (TCV), with 41% from net new business
• Interim dividend of Rs 21 per share, record date October 29, 2024
• 25.2% YoY growth in free cash flow, totaling $839 million

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