The management said that though they were confident about the demand environment going ahead, with customers looking robust on tech spends, especially cloud and digital, margins would get impacted by wage hikes, which would be staggered. The company expects travel to pick up in the second half of the current fiscal year.
Infosys’ capital return policy came into being a couple of years back. As part of it, 85 per cent of cash is returned to shareholders -- either through dividends or buyback. “If you look at the payout we have done in the last two years (FY 20 and FY21), we would have returned about 83 per cent of the 85 per cent to shareholders,” explained Nilanjan Roy, chief financial officer.
When compared to industry peer Tata Consultancy Services (TCS), Infosys
performed better on a year-on-year basis, but lagged in sequential growth. For instance, the total contract value that TCS registered for Q4 was $9.2 billion; Infosys, on the other hand, has large deal signing of $2.1 billion, lower than the $7.1 billion it signed in Q3.
has reported a mixed set of numbers for Q4FY21. It has given a healthy double-digit guidance and has also been able to defend its margins despite wage hikes. In addition, the company has consistently performed in revenue terms over the past few quarters and is also narrowing the gap between TCS & its margins,” said a report by ICICI Direct Research.
Debashish Mazumdar of Edelweiss Wealth Research in his report said: “Infosys stock outperformed TCS in recent times. But, the company in this quarter underperformed TCS on all parameters, like growth, deal signs margin and attrition.”
Infosys’ margins were at 24.5 per cent, a fall of 90 basis points due to wage hikes and cross currency. The company expects a wage hike impact on margins even in the first quarter of FY22. TCS’ operating margins were 26.8 per cent, an improvement of 20 basis points.
On a full-year basis, Infosys crossed the milestone of Rs 1 trillion in revenue. For FY21, the company reported revenue of Rs 1,00,472 crore, growth of 5 per cent YoY.
Growth for the quarter and the year was driven by the BFSI and lifescience sector. BFSI grew 15.6 per cent on a constant currency basis in the fourth quarter. Of the 25 large deals signed, six were from the BFSI segment.
One of the concern areas for Infosys is the attrition rate. For the quarter the company's voluntary attrition rate touched a high of 15.2 per cent, up from 10 per cent it reported in the quarter ended December 31, 2020.
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