Infosys Adjusts FY24 Revenue Outlook After Q3 Beat, Stock Ticks Higher

Infosys Ltd (NYSE: INFY) reported third-quarter revenue growth of 0.1% year-on-year to $4.66 billion, beating the consensus of $4.63 billion.

Revenues in constant currency (CC) terms declined by 1.0% Y/Y and Q/Q. TCV of significant deal win was $3.2 billion. 

The operating margin declined by 100 bps to 20.5%. EPS of $0.18 was in line with the consensus of $0.18, down from $0.19 a year ago.

Infosys held $2.6 billion in cash and equivalents. It generated a free cash flow of $665 million, which grew 15.5% year-over-year at a conversion of 90.6% of net profit.

“Our performance in Q3 was resilient. Large deal wins were strong at $3.2 billion, with 71% of this as net new, reflecting the relevance and strength of our portfolio of offerings ranging from generative AI, digital, and cloud to cost, efficiency, and automation,” said Salil Parekh, CEO and MD. 

“Our clients are leveraging our Topaz generative AI capabilities and our Cobalt cloud capabilities to create long-term value for their businesses,” he added. 

FY24 Revenue Outlook: Infosys revised revenue expectations to a growth of 1.5% - 2.0% in constant currency (prior 1.0% - 2.5%) vs. consensus $18.59 billion.

The stock gained 14% in the last half versus the broader index SPDR S&P 500 at 8%.

Price Action: INFY shares traded higher by 1.60% at $18.39 in the premarket on the last check Thursday.

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