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IT services firm Infosys on Thursday reported an 11 per cent rise in consolidated net profit in the June quarter at Rs 5,945 crore, but delivered a shocker by slashing full year growth outlook to 1-3.5 per cent hurt by macro uncertainties and delayed decision-making in the market.
The net profit (before minority interest) during the same period previous year stood at Rs 5,362 crore.
The company posted a revenue growth of 10 per cent to Rs 37,933 crore, up from Rs 34,470 crore in the year-ago period.
The country's second largest IT services company -- which competes in the market with TCS, Wipro and others -- drastically lowered its revenue guidance for the full year to 1 to 3.5 per cent in constant currency, down from 4 to 7 per cent projected earlier.
Seen sequentially, net profit declined 3 per cent over the March quarter, while the revenue rose 1.31 per cent quarter-on-quarter.
Salil Parekh, CEO of Infosys, flagged delayed decision-making, saying, "We had good Q1 with large mega deals, but we have seen some of the deal signing and start dates being delayed."
Accordingly, the revenue from these mega deals will flow in the later part of the financial year.
Through the quarter, Infosys saw volumes in specific industries being impacted where clients reduced transformational projects and decision making slowed.
"When we look at volumes of discretionary projects, we see some of them slowing down.
“We see good traction from generative AI and mega deals," Parekh said during a briefing on Q1 earnings.
In the Q1 results statement, Parekh said that the company had clocked solid Q1 with large deals of $2.3 billion "which helps us to set a strong foundation for future growth".
"Our generative AI capabilities are expanding well, with 80 active client projects," he said.
The company has expanded the margin improvement programme with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by leadership team.
The company also declared a final dividend of Rs 17.50 or Rs 5 per value of equity share, approved in their annual general meeting on June 28.
Last week, TCS, HCL Tech, Wipro and LTIMindtree announced their first-quarter results.
LTIMindtree this week posted a 4.1 per cent year-on-year rise in its consolidated net profit to Rs 1,152.3 crore in the quarter ended June 30, although the numbers were a tad below market expectations.
Wipro on July 13 posted a 12 per cent year-on-year rise in consolidated net profit at Rs 2,870 crore in the June quarter but missed analysts' estimates as reduced discretionary spending by clients impacted its financial performance.
HCL Technologies reported a 7.6 per cent year-on-year rise in its June quarter net profit on the back of new order wins.
TCS registered a 16.83 per cent increase in its June quarter net profit to Rs 11,074 crore but sounded circumspect about growth prospects for the fiscal due to market uncertainties.