Analyst Meet / AGM     19-Apr-24
Conference Call
Revenue growth guidance at 1-3% in CC terms for FY2025

Infosys hosted a conference call on April 18, 2024. In the conference call the company was represented by Mr Salil Parikh CEO & MD and Mr Jayesh Sanghrajka-CFO.

Key takeaways of the call


Revenue growth was flat in Q4 YoY in Constant currency and declined by 2.2% QoQ in constant currency and declined 2.1% in US $ terms.

During the quarter the company had one large deal renegotiation and re-scoping of contract in BFSI vertical which had an impact of slightly over 1% on Q4 revenues. While part of the work got re-scoped, 85% of the work is still with the company.

EBIT margin for the quarter stood at 20.1% in Q4FY2024, a decline of 40 bps QoQ.

Margin Walk through: There was a head wind of 180 bps of which 100 bps was on account contract renegotiation and re-scoping, 80 bps on account of salary increases, higher cost on brand building and VISA expenses this was offset by tail winds of 140 basis  of which 60 bps was lower provisioning of client receivables, 40 bps  from project margin maximum and 40 bps on account of Q3 impact on cyber incident.


Revenue growth for FY2024 was 1.4% in constant currency terms. Normalising the one time impact, the revenues were within the guided range of 1.5-2%.

Revenue in BFSI segment is more impacted for the company than its peers on account of more share of discretionary component and also due to contribution from mortgage which is more impacted due to macro-economic headwinds.

EBIT margin for the full year was 20.7%.

Margin: The company continues to focus on the project margin maximum program and it had an good impact in the  FY2024.

Project Maximus a comprehensive margin expansion program has continued to run well across 5 pillars. This is reflected in more stability in margins, compared to FY2024 over FY2023

Free cash flow: The company generated US $ 848 million free cash flow in Q4FY2024.

Human Resource:

LTM attrition declined to 12.6% down from 20.9% in the previous year.

Head count the company’s total workforce stood at 317,240, marking a decrease of 25,994 employees compared to fiscal 2023.

Utilisation stood at 83.5% excluding trainees in Q4FY2024.

The company is agile in hiring and will be able to hire more when demand picks up for both freshers out of campus and also lateral hiring. It will take 6-9 months to put campus recruits to work while it will take 1-1.5 months to hire lateral workforce.

Order book:

The company had anexcellent quarter and full year for large deals.

The company signed large deals to the tune of US $ 4.5 billion in Q4. The company signed 30 deals including 2 mega deals. 44% of this was net new. The company signed 8 deals in communication, 6 each in BFSI and retail, 4 each in manufacturing and life-sciences and 2 in EURS.  Region wise 16 were from North America, 10 from Europe and 4 from rest of the world.

For the full year the company singed US $ 17.7 billion worth deals with total deals of 90. Of this 52% were net new and 8 were mega deals.

This was highest ever large deals in any financial for the company and reflects the trust which the clients have on the company.

The company witnesses good traction in cost efficiency and vendor consolidation deals.

Ramp ups of large deals are happening as per the plan.

Generative AI: The company has excellent traction on generative AI work.Every 8 out of 10 employees are being trained in Generative AI.In Generative AI, the company has projects across software engineering, process optimising, customer support, advisory services, and sales and marketing areas.

The company has generated over 3 million software codes in Generative AI using large language models. The company has embedded Gen AI in its services.

All of the company’s AI work is part of the company’s Topaz offering.

The company is the first to achieve the ISO 42001 2023 certification.

Cost benefits accruing on account of Gen AI and AI are being retained by the company as of now.

Cloud: The company’s cloud work is progressing well. The company continue to work with major public cloud providers around private cloud programs for clients. Cloud with data is the foundation for AI.

Acquisition: The company has signed a definitive agreement to acquire in-tech, a leading Engineering R&D services provider focused on German automotive industry. This strategic investment further strengthens the company’s Engineering R&D capabilities and reaffirms its continued commitment to global clients to navigate their digital engineering journey.

The company announced that it will acquire a 100% stake in German firm in-tech in an all cash deal for 450 million euros, or about Rs 4,000 crore. in-tech develops solutions in e-mobility, connected and autonomous driving, electric vehicles, off-road vehicles and railroad. 

Dividend:  The board has recommended a final dividend of Rs 20/- per equity share for FY2024 and additionally a special dividend of Rs8/- per equity share. This constitutes 85% payout as per capital allocation policy.

The board has approved the capital allocation policy for the next 5 years, effective FY2025 the company expects to returning 85% of the free cash flows to cumulatively through dividend, special dividend and share buyback.

Guidance: Revenue growth guidance for FY2025 is 1-3% in constant currency.

EBIT margin guidance for the FY2025 is in the range of 20-22%.

The company witnesses digital transformation and discretionary spending at same level as in Q3 and Q4 of FY2024. The company witnesses focus on cost efficiency and vendor consolidation continuing.

The large deal win in FY2024 will help the company’s revenue growth in FY2025. The company witnesses normal seasonality in FY2025 and for the company H1 is usually strong than H2.

Guidance does not consider the acquisition which the company has done on April 18, 2024.


BFSI vertical: The company is witnessing macro-economic factors including high interest rate and high inflation impacting BFSI vertical. This has led to BFSI clients being cautious. Pipeline and deal wins are strong in BFSI vertical. The company expects FY2025 to be better than FY2024. The clients are investing in digital, data, AI and cloud. The company is working with clients on cost optimization.

Manufacturing: manufacturing vertical had broad based growth in FY2024 due to increase traction in engineering, IOT, supply chain, smart manufacturing and digital transformation. The company’s differentiated approach to AI helped the company mine and gain market share. Topaz is resonating well with the company’s clients. The company has healthy pipe line of large and mega deals. However the company expects manufacturing vertical growth to moderate when compared to FY2024.

In retail clients are leveraging Gen AI to provide business value. Cost take out deals remain priority for retail segment.

Clients in communication sector continue to be cautious. New CAPEX remains under check and budgets remain tight. The company witnesses opportunities in cost take outs, AI and data based initiatives. Growth will be led by ramp ups of large deals which the company has won.

EURS clients are taking cautious approach with focus on cost optimization and AI driven efficiencies. The company is witnessing opportunities around vendor consolidation and infra managed services. Deal pipe line in large and mega deals is strong.

Macro concerns in Hi-tech continues. Discretionary programs are kept on hold.

Margin: The company expects head winds on account of increase in salary which was done in November 2023 which will have an impact for the whole year. However the tail winds for margin in FY2025 are increase in utilisation which for the company is comfortable around 84-85% while currently it is around 83.5% excluding trainees; Sub contract cost- there is scope for reduction as it is around 8% and the same was around 5-6% pre covid; there is scope for efficiency improvement and also pricing is an important lever for the margin  expansion for the company.

Management commentary:

Commenting on the performance Mr Salil Parekh, CEO & MD said: “We delivered the highest ever large deal value in the financial year 2024. This reflects the strong trust clients have in us. Our capabilities in Generative AI continue to expand. We are working on client programs, leveraging large language models with impact across software engineering, process optimization, and customer support”

He further added “I would like to thank our 317,000 employees across the world that are working to create value for our clients.”

Mr Jayesh Sanghrajka –CFO said: “Free cash flow of $848 million in Q4 was highest in the last 11 quarters driven by our relentless focus to improve working capital cycle. Consistent with the objective of giving high and predictable returns to shareholders, the Board has approved the capital allocation policy under which the company expects to return 85% over the next 5 years and progressively increase annual Dividend Per Share”.

He further added “Operating margin expansion in the medium-term and improving cash generation continue to remain our priorities underpinned by early success in Project Maximus”

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