INFY - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, good day and welcome to the Infosys Earnings Conference Call.

As a reminder, all participant lines will be in the listen-only mode. And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mahindroo. Sandeep over and you, to you, sir. Thank

Sandeep Mahindroo

Hello to discuss Margaret. the Relations everyone I’m and call earnings Investor Bangalore. in Infosys to team QX from welcome Sandeep Thanks, FYXX results. financial

that and anything which the Mr. complete call by statement company is today explanation us MD, the which be on Parekh; for before some Mr. forward-looking the Nilanjan faces. members with on of with that outlook and statement, Roy www.sec.gov. available call can of is to Salil, management which these with on say Pravin found Joining initiate to risks pass we CEO would must up filings be to the the CFO, opening on Rao; recently call conjunction for in performance senior I Salil. this most the Mr. our company is Please it concluded and like Salil along on SEC, Pravin in our note a questions. refers of other A the Nilanjan COO, future read the team. risks remarks which We’ll quarter, the the now with

Salil Parekh

good digital trust our scaling, reduction continued of clients. and exceptional I'm to in wins, continued trust attrition. large and deal safe proud revenues, evening everyone the Good call. the and to account for expansion, us I'm for second I our in quarter incredible Sandeep. Thanks healthy. employee flows, expansion, operating to cash We've the in dimensions, our margin grateful team multiple strong each commitment clients their impact, client on are you an of morning and had quarter across

of QX. constant you very X.X% the a highlights grew Revenues back strong sequentially X% me share at some on QX. of the Let in with year-on-year, and currency for

variable year-on-year We revenues accounts was HX delivered HX above XX.X% contracts XX.X% awarding a of X.X% deal work] constant Digital grew continuing deal sequentially. now revenues. and Our our on expansion in XXX%, in with for one-time TCP US$XX of [our wins, transformation employees as special of XXX is at Large digital XX.X%, achieved cost constant efficiency. million terms. which growth for have pipeline basis and which basis currency, was at pay $X.XX rewarding an and billion. focus operating been points programs clients for our at points bonus. in after margin currency over strong year-on-year XXX were remains look This their automation and Large accelerating and at

services IT is X.X%. at in attrition voluntary Our

a flow Our at XXX operating cash million, was XX% increase year-on-year.

sheet balance position with billion $X.X remains Our strong with and investments no debt. cash at

employees the leading our first the stellar quarter the at the employees. contribution performance XXX%. of commitment from been times, of a has pay we are XXX,XXX this these immense Our paying out over due continuing year industry half Recognizing to variable over during for

with hired step available XX,XXX leading all The will across announced another launched plans workers together and XX,XXX across expanded with January took pay six Infra-as-a-service built cloud navigated XXX incentive support SaaS, in years. next hiring U.S. industry solutions navigate now local I'm Infosys hybrid better the personal QX, digital to reducing in centers in components to a XX,XXX with will in sustained over templates we are In We the approach first investments and The own years, in believe In XX,XXX staying talent. will commitment all GuideVision and launched one localization and the for journey us the market clients to ensure associated we've for Cobalt U.S. as their our three strong across Adobe; workers. risk X, and to programs. PaaS, and and for clients be We process The restart now of saw design. global private, on public, a product and levels. our will markets employees medical will on environments. their themselves hire in help where XXXX. restarted we cloud cloud employees. clients focused differentiator U.S. the and last cloud to cloud model. We companies is is our situation cloud programs. additional hiring our Cobalt to announced has the in past challenges to Cobalt over also partnerships ServiceNow; with effective years, able continue combination localization be now level U.S. increase bringing QX focused and a salary Blue our junior U.S. two plans ongoing regulatory of a significant of the past Acorn We the platforms, will the a operating three acquisitions months promotions special our remote an We local clients one-time This over our on focused committed they services, to levels. five junior the serving COVID large accelerating our as three us that our thankful at changes. quarter Kaleidoscope brought each the deeply we servicing

to Today exceptional. and is workforce tremendous. The to the XX% Our our home. be from clients feedback positive service dedication remains of from work continues of employees delivery continues

Our digital combination strategy client’s needs and our results a clear execution focus in a the cloud aligned a of of build steady a QX company. to and are on continued

it year. to Pravin now on XX% for we margin for X% year-over-year. currency to year, ahead, business. to it our growth see X% our to XX% Looking moving X%, X% operating XX% operations. to XX% the in to strong guidance request our from increased you And constant Pravin. year the Over full full to traction to our moving We in from update guidance you. full let continue me We you to for increased the Thank revenue

Pravin Rao

Salil. Thank and all Hello, are well you Hope you, everyone. safe.

resource employees ramping constant our delivery centers increased vast on included complexities pandemic, X on across the a Revenues to relevance revenues the Quarter through further of With from As impediments. us from constant employee the remain positive focus only we on [work as contribution and plant by during the our to of utilization. in globe are navigate focused clients ensure successfully. technology growth which caused to currency. marginal rock help working in effectively is manner. talent should during by deal, quarter Several up started cost. and secure robust efforts closed onshore the majority continued remaining to all start increased efforts utilization, the offshore and in share, by this onwards. most of RPP, performance operating sequentially well-being Growth to top from home, accelerated improved the X improvement parameters solid helping Vanguard continuing gradually, XXX in we quarter: Year-on-year the quarter in of account of across the to continue and wait delivery] offshore ease and X. are Utilization X% currency to and delivery subcon XX.X%, on five economies bips XX.X%, our and retail, deal for Onsite Region quarter X.X% were number up one one quarter was significantly sequentially in of effective on in X. strong making services, a opening world improved from on three mainly quarter X.XX Voluntary the overcome America, key wins XX financial lower were salary levels, of and and Client declined while our from won deals the at XX XXXX. increased which the Share wise sequential the all tech, stellar to from band was of services, two to each added employees, for year-on-year in than large in by X, each communication four clients our million energy XX%. deal reason quarter XXX] decided our by in high attrition strong. Europe, of We IT highest ever. during the X.X% remained billion. end were basis. deals hundred X, clients have improved metrics six the deals out the lowest three rest across [to services and new in months, the performance increase improved others. world. Recognizing of XX manufacturing last efforts XXX XX% mix RPP to January in XX%. ever X at bips has and comfort deals affect also of Large which both We utility the been we quarter quarter, of six deals

with U.S. program] Department be qualifications special a of per Recently, levels. We will on Homeland significantly employees paid wages. in separate higher the and [H-XB rules, scrutinizing which XXX% incentive, restricting variable mandating paying two Security issued the X Labor quarter are lower and along visa both pay to

U.S. hubs regulatory navigate three past the technology the workforce, ability gives us over However, to the American terrain. innovation our dedicated the our new and this focus on local years and across across

lot seeing industry tractions continued six recognitions demand in segments, programs, digital in in remained started financial in of to quarter, government mortgage coming business significantly sequential on advertising, segment, the services in servicing, financial to and banks lending some furloughs center of in investing year-on-year and such communication in in especially possibly world both to banks in basis. up multiple as uptick on Performance call back momentum remain and given post-COVID OEM media, areas been across business in on received has Moving with pressure platform weak that this on has ramp seeing embark The technology given and saw operations, cater services have should as Finacle transformation. in banking X revenue wins. continuing in day. Vanguard increased as volumes large for however relief segment services the quarter various they the quarter, as earlier segment are entertainment, coming performance, are large this deal and deals during spending, the months. This the last transformation and the well liquidity including We propel quarters. the cautious and programs. increased They’ve They award of also segments. digital issues, winning signed growth improvement pickup retail

this continue Energy, resources spending is this quarter, have constraint of should to and under sector. which the won pressure help also We in and to in services last and vertical large deals performance two the a pipeline segment. travel and have resources, for in in due and gas, oil strong deals hospitality, stabilizing segment utility,

cost improvement and a build in for opportunity decline significant from presenting pipeline. during stable takeout is is volatility a we the current were quarter, strong which to continue Manufacturing quarter the X. the segments sequential However, massive

disruptions Cost of is the remain are may for clients up takeout [indiscernible] we sluggish. opening recovery across there sectors. are a pace While our of seeing segments, pockets, focus major although

recovery in level at of remains us We pipeline the gradual future deal The prospects. openings. and in improvement hopeful a account segments with makes new volumes expect healthy robust and the

XX% year-on-year now digital constitutes last constant In over quarter, at digital capabilities the XX in by Our strong in currency have portfolio overall industry revenues. leader areas growing been is we services XX.X% across analysts. of and as rated pentagon related

the of the colleagues support hand Lastly, extending have their to my five over families all pandemic. and heartfelt will during of to to With trying condolences together We families that, possible Nilanjan. stand due whom I lost are our we times. to these

Nilanjan Roy

and of are everyone. Pravin. Thanks Hope well you ones. loved safe Hi and families all with your

has XX.X%. On Revenues sequentially the quarter liquidity grew for show cost comparative headwinds. quarter improving HX client translates higher currency This X% and performance utilization X.X% relevance, management. a focus to X, up back SG&A of unwavering mix, constant XXX X.X% offshore onsite were expenses at a our led prior the to quarter other compared operational year-on-year improvement cross increase performance amortization was operating the in basis travel increase X strong to excellence, due XX in margins to XX%] Benefits on to and reported currencies. than margin to in due temporary increase the consequently by with partly band for offset period. in continues for depreciation and by HX XX.X% improvement basis sequential a a reduction and improvement The constant and X.X% in X.X% in and Improved to margins higher [XX% in XXX led due the restrictions. by expanded XX to points to bips year-on-year RPP, Operating in currency. from X% due points and sequentially bips growth to margins XX.X% QX

towards organization in out X.X% expect impact risen days growth some The of XX% DSO margins. the enablement increase in by for is to quarter INR technological and during increased All was year-on-year. improvement on by robust in percentage with margin hikes X salary quarter these overhead as we in HX and which remained a of X, spend of commence of the the was $XXX QX, employees. in EPS benefits grew HX million, in to in terms, rule QX on terms, X XX.X% healthy with hiring of CapEx dollar and in cost for grew a and Collections we costs. shrink FCF by for XX.X% of a reducing XX.X%, XX% this basis. a XX.X% will the travel etcetera mainly HX was on XX. and EPS the by XXX% dollar a growth year-on-year the to As consequently compared Free has equity difference year-on-year flow basis. employees, Return INR and HX. quarter XX.X% some promotions higher net cash year-on-year XXX% for prior profit across as year. to our from

dividend announced the and the our FY at free capital strong allocation which constant guidance are improved liquid very billion. XX, to XXXX. consecutive yield XXXX The X.XX% of Based X%]. has interim ForEx end X% Rupees board interim XXth declared strong we a in to to volatility across on the an balance with per X.XX% FY flow income, and cash from to HX, the $X.XX on cash investments growth in over compared terms a were the is the Quarter our of X to by dividend sheet, of globe. XX% maintain in share cash previous continue increasing balance the currency X% despite X quarter. on revenue We in quarter debt QX, the significant improved marked Consistent [X% to previously quarter currency of and performance policy, positive the

for to margin With can that, We are XX%. to also from to questions. XX% we XX% for increasing the guidance up this the year open XX% call

Operator

Yogesh [Operator Please much. of The is very Aggarwal Instructions] go the question from ahead. first HSBC. line you Thank from

Yogesh Aggarwal

Yeah. Hi, thanks for taking my question.

largely have contribution I hopefully well. seasonality while if strong the that deal you doesn't may? such there despite clarifications know, a Firstly, in-line guidance, guidance bit two is look second Just strong the implied you the little upgraded as from half and acquisitions wins with

So, going some and cost Nilanjan the front, verticals bonus This decline is expecting forward? despite quarter-on-quarter. down secondly, are incentives. certain on special employee actually cost you And is in the

So, is mix? that largely offshore

Salil Parekh

Thanks Yogesh. This is Salil.

quarter-on-quarter start with me steadily see the in different the for one. Let first QX activity We improving all QX industries. and

now as mentioned, stable, is strong, life looking some Sciences good, starting progress. is service see to is high-tech example, For Pravin financial retail also

in However, quarter normally. Infosys. QX there furlough impact traditionally, And been has QX always are the for soft

we've So, we the you have don't our mind in very that we see demand anything negative and place. that strong in conversion, the deals outlook. guidance And see the large in in raised fact, much keeping good

to second part, the Nilanjan For over you.

Nilanjan Roy

people. a thousand if we Yogesh, headcount, from net so you added Yeah, see about only

So was less this X.X%. than

said, to offshore absolutely there you’re I is this the of the So change, travel like much due was but restrictions onsite helped not the employee temporary right, mix overall cost headcount imposed. down, has to but come

Yogesh Aggarwal

you. Thank thanks, it. Got Many guys. Got it.

Operator

line next Thank go Please Padmanabhan ahead. you. Investec. question of The is from from Nitin the

Nitin Padmanabhan

and through is, Thank my second great a this a have how app thanks because now one-time that spends shifts is time, Obviously, two forward? largely Are One two broad more these think do are funding that's see you. within And modernization, spends? going restrictions, congrats seeing shift now, is are offshore excluding for cloud the Vanguard, a but already of clients did there's I these lot we offshore questions. mention Had questions, You higher travel deals you Yeah, you're about that funding the that on deals? a on taking had migration? clients these quarter. spoken lot incremental we you actually. services that, the so of won nature question, the seeing what Hi, far.

Salil Parekh

the the it we're we've working Thanks. Salil. cloud cloud applications, digital but ruling out things related area building areas. in hybrid cloud, first transformation, This on is part what which of three our seeing cloud large private and first One I'll essentially cloud migration, is which and in deal a an public The is start around with environments. one. deployment, types everything cloud, area and for SaaS, also of is to closed, pipeline

The some modernized pipeline, on focused for in how more can the see and we the it's And be automation, second where essentially which we clients. made efficient on cost in is efficiency those in have which be to is of are the relates quarters traction. some seeing to estate] sense, but that efficiency in our consolidation, – consolidation we third, over where vendor we'll [IT and discussions see areas next benefits few terms conversions, the

it as taking think which client programs, our estate that, you and I terms funding really in these of alluded few – but of is within last work the thesis differentiation, next for will growth, or clients months has volume how growth funding demonstrated it, for pipeline. what that offshore through the existing see, there In of and of access option experience all main automation environment, Part still means funding forward. we the despite going in revenue done out their also will both an be it is be our be which cost and could the give because is, growth clearly

Nitin Padmanabhan

Sure.

there have takeaway? So, the experience if you it could right travel future think were that far on got shifts that offshore Is be suggesting the so far. so the I offshore restriction that I shift based right, seen perspective, is based, offshore we but on the

Salil Parekh

Equally in now sense. on will more of or onsite. restrictions ratio understanding what offshore the that be possibilities are Once travel is onsite work is the to option. more there mix difficult probably forecast there The structurally, less, become

play will [into ahead points are first will and as but they timing how which one out. of speed, sense the in of look we countervailing what clear be the both relevant mix]. happen both not those And are also will those the So

Nitin Padmanabhan

you the Sure. and Thank best. much so all

Operator

Wedbush Thank next you. Katri Please question ahead. the The from is Moshe of line Securities. from go

Moshe Katri

the One, very in guidance just much, M&A Two a Thank pace I given terms quarter, good for And Hey, for way to XXXX businesses. new rates is questions the in thank bookings follow-up, think very growth? terms actually you to M&A congratulations renewal here. is for quantify contributions XX% of a you their for as which then team. fiscal your that the say from expected the is incremental accelerating the and fact there was, that of you. did just year

Salil Parekh

second renewal. net comment will the new one, on On the Pravin

that M&A months. were percentage be that first, know our the clear have Salesforce a will On which view have something don't M&A. in done over an transactions Adobe; It we the business fairly We've the deals. model, do ServiceNow. three a We there areas. in did don't come percentage in there in in something have of did good we last from is design. is we quantified will [indiscernible]. targeted pipeline we What in of We've not product something three acceleration I –

good specific And see where company. the and within so those are business tremendous organic a areas we growth

play. So we that be should the way

In year specifically, from that net come target much how you if want a have don't M&A. terms Pravin, of something? will this we new on the

Pravin Rao

This here. Hi, is Yeah. Pravin Moshe.

[indiscernible]. in it's quarter-on-quarter, times The But of liabilities new when of obviously a lot right. the nature – quarter. is are come obviously renewals new are numbers very do vary a XX%. net And total depending positive net absolutely You’re thing. these there Higher for due particular due and deal a the on in

Moshe Katri

bid that the in in Is there of proposal look mixes? of pipeline next versus the and different different terms anything new say at deals? would When terms you renewals mix months, X is historical to your XX the for you

Pravin Rao

renewals, we will mix it's have a difficult closer. new as I I the both when mean net a would to very get in It’s well combination, – finally, as It I timelines of right? deals mix. got the healthy predict mean, say these

percentage – is, I look that historical percentage the probably new. – mean I new I So in have you the thing at mean terms how higher side. you higher quantify probably Obviously it's know, definitely I on of at of a the probably, net if this the how will but is stage much bearing of may can't on pipeline But, in net the higher there, be really mean it this, side.

Moshe Katri

and congrats. Thanks,

Salil Parekh

Thank you.

Operator

the next The Keith Please Bachman from go question Thank Bank is line of Montreal. you. ahead. of from

Keith Bachman

had I thank Hi, couple as well. very of you a much. questions

just Thank of enhancement any margin? on which throw growth a XX.X? the X.XX – to currently press in you high how release I'll could could the at TCP suggest year-over-year of booked but said related off, offshore the offshore some much. would rate moving work to in my the are on about was quarter And when more in that limit barriers is just I is there, could tension that work, the employees First is that a you is, clarify, the billion, think see work talk third question limit question. you U.S.? forces was a there your many first of question work? is the what floor]. that that how you is there onshore a at there And [see you very go, quarter of percent you I'll in natural that know cost were us Is for the was significant advantage using second higher, tell you you a out And visas

Salil Parekh

that question. jump Pravin Thanks with in other then second the the This is one. go for And the two, Salil. answers. I’ll can with

terms the limit. In natural there a offshore of is

different I clients have that to the certainly both all up done ability for costs are think we've the There and an be the to six things there's as the offshore. of work last opened months. more learned, as

there's some there]. a sort see So, [ceiling I of don't that

it experience, offshore how having is to from that of work, our And and and proximity. an some that's I also from is done on, Studios, benefits of which Digital see and design has as critical we to see some work think perspective. working expanding what also is, work we going also some more more that can relates be

function that to get in discussions, starts approaches client it's to different be what specifically, carved how a So out see sense as we but of that the offshore moves work, and of on. in that seeming don't

please? the two; if For to ahead want other go Pravin you

Pravin Rao

year-on-year On large come that to number the the first when before I'll just compared question to getting back call you ends. on deals, I’m

Nilanjan Roy

can just that. in quickly chip I Pravin, on

did we is, in the we the X.X, but only of last XX% last big figure. year X.X, So, year new year difference had this net

now XX%. We are

quality improved. So book of order has dramatically the the

Keith Bachman

Wow.

Okay.

Pravin Rao

And what the third was question?

Keith Bachman

Number of thesis out the just employee or currently employees U.S. of that’s employee number base of at use subject the new that net renewals you but your your that either are base current are, U.S.? know, of in in to visas

Pravin Rao

Yes. Go ahead Nilanjan.

Nilanjan Roy

we as in so U.S. call were employees dependent Yeah, the XX%. visa mentioned, what we currently about

Keith Bachman

Thank you Okay, and much, great. congratulations. very

Operator

is next Please ahead. Thank of The you. question Agarwal line from Edelweiss. the Sandip from go

Sandip Agarwal

quarter the first congrats and thanks health strong of get have our I all, and with I the management current has numbers. still for technology and execution of just core and employee’s gesture because you and also rewarding good companies world-class still also in-line Amazon. high know, like digitalism wish two quite Infosyians is, in by work Hi, all been shrinkage good growth excellent hurt very and excellent questions. on all that. One also on the opportunity, good of

hurting think benefits That for like So them. two, with one. probably a going a growing way? long question finally but answer you at have number geographies, this of attrition asking you on and is other not in in are forward, you being Why to this do they much base, this you am it they low-double digital same percentage lower attrition, number pandemic EPAM at up of faster what advantage others the the also, you forward? And even put probably understanding core shoot know, and if it will ratio? Or whether I when stabilize those the on do think now acceleration you kind will think competitors your the on small is, then our question question same continue or will this lot. are going is a see X.X% think we Thanks will can okay you has level digit? cloud And

Salil Parekh

I’ll growth Thanks the will on Sandip. The second are at Pravin overall be the to back. is way cloud This robust one and Salil. digital the answer XX%. the and we first digital first and third, seeing, come continues

you're traction in tremendous it own and of can I own cloud of pace, the are a the on good think the right, of also some we that we where shape with quite and and already we doing adopting in many good Cobalt. cloud cloud see clients We assets our further where some in expand keeping set name see side we see we we faster capabilities; launched of are acquisitions at strengthening faster. Infosys our under a are and places are our

So cloud that's several next is years. obviously, the will work believe for definitely something working We well.

So, Pravin, over to you, please.

Pravin Rao

Yes.

the it often and the years from of digital spends post-COVID in repurposing client it [indiscernible] accelerated remains the and some is they're aspect away and we taking funding the issues, steady able are become I IT deal percentage automation the percentage same transformation by spend other by transformation overall Beyond which And every only couple at the not, in plants a technology we the looking tremendous supply have core. shrinkage, in fact, when spend to so pandemic, core always increasing, secondly, of digital pandemics, back really than means, so initiatives on. from or about happening, workplace, costs at look taking mean, chain what's how uptick in this the has to is I investing and seen today, started Obviously, to of not so with front discretionary of the building and fund are as core digital in fixing resiliency, think, out general, of IT revenues, through it. that's is from more world. one people And

same So you the some also our will shrinking, because because almost the also is in seeing because we us. that have your modernization ideas overall we an see are wherever And to thing. element But taking share core other many talking you're will deals of and shrinking, deal the see fact, of growth, of customer as digital core win, overall growth, large it's cost part as – And increases, we seeing shrinking you we with is flare large pie. of for core are about long are of also also always even win we always then as proactively really your taking a out positive the legacy. every

that gets means core of that and the the that in gets modernized part now digital. So content

plants core, So, invest mean – you mean but at way some they of actually it they competitive. I they you technologies have need look core a IT the is between and stay fund in some they’ll within that spends and – that and spend to to look some of the the the at have spend discretionary how I to optimize will newer also IT so mix core can

long as as in digital we to to the of role spend, grow very continue and to in continue have play as a a then both we as it I terms we thing. think core, well view So, as positive

of lowest the seen mean the of it's attrition history in One, two a have on Now obviously I of have attrition, today obviously, things. the world. is lot Infosys. one the that we terms the pandemic, combination have also it's market, of in focus the to the employees of engagements employee we that a have of virtual put with it's the how welfare, the the but reacted in we we combination

on we so mental and and of – focus stress, have there focus so that employees been under is physical also on. lot We both wellness also recognize

interventions, XXX so enabling work a from as company where really and have market the the war than combination, them there of attrition combination a dealing employees appreciative supported reality terms with for is, pandemic, particularly because this how during But on. opens some also more the up amount mean it’s a cases lot – has involving current gone they'll launched a are crises. of the to have well be be one as positive will the and once beyond have test I we But of them in of up, in talent. definitely going home, We employees families

the years. So been over talked mean, probably our zone maybe, comfort digits, I period go because all we have to a will sense over it of our low-single time, about, back as is

Sandip Agarwal

Thanks for lot. and again, of best quarter. a next Thanks luck

Pravin Rao

Thank you.

Operator

Please Bergin is Thank of you. Company. go Cowen line and The next from from Bryan ahead. the question

Bryan Bergin

to you. thank ask Hi, first margin on sustainability. wanted I

of have benefits should accepting the of you're of ability mix factors really, projects today, half, cost some Are become delivery, is the much short-term? clients second give about and we lasting margin how normalize? on how understanding the in as to of you the think of operations here sustainability virtual us some a there on have but So, dissipate how you've delivering shown sense expansion that more versus based how any the

Nilanjan Roy

so… Yes,

Salil Parekh

ahead? go Nilanjan, you want to

Nilanjan Roy

Yes. go I'll yes. with Yes, that.

of I my year. So you have seen know, beginning three leavers, that, started in we this like benefit our the of the we both mentioned at kick speech which

the which impacting of the in had limited headwind we the talked across, we've beginning to the promotions, first the that. was will from helped the and been we which start quarter, start which margins. had now also impacting junior us And will promotions, largely the the will January, has at in margins. level We've hike deferrals, implemented of cost that will mentioned levels. terms of coming all the first roll-out It from back fees, about First quarter. clearly, but see will talked recruitment about half, hikes, be wage a we it across We've it we see wage the first so that employees, that

we travel, see you like expenditure in cut discretionary also is had can as Second results. our that

come Of has course, travel dramatically. down

like cut also Some of et the expenditure back. brand more were building, discretionary cetera,

well. up We will as see some of that going

is which which strategic an around us, have is the and mix. cost we most ongoing – on-site for the is program, the offshore Third this lever, important

seen have down in that to returns. we that mix of and will have as Salil continue But and travel strategically, as on-site mentioned to benefits some seen see issues that temporarily I of had timing offshore we to coming changing. intend over that see of earlier some mean period question, We a time

pyramid. Second is a

the well, we've the think well. Automation that really strategy looking community the and helps at pyramid done on-site cetera at from work hub a et freshers and around lot us as basing on-site calculating offshore as of the I for in then pyramid broad the the remains heart. colleges now

continue more for to clients. and get and We our efficient productive more

productivity you that is part is know, that clients improved and as margin back of our discounts of passed and Some improvement, strategically. to

So, these lever. the are different strategic

you which if benefits back, you the that, very how to know, our sustainable. to is see move technology and So premature and three, and it's we to it will terms you can we home talked invest very, that of come now we this know, hybrid have seen, premature much be know, Work know, do or facilities pronged model, as will back for we security. is much say about we've but to of keep – we think will remains this of of approach, in in that how we some communication but travel, some you this from more and, as come of what of does

So there to bit balancing some there about well, as talk that. may premature so be a

Bryan Bergin

prong the so strategic in those last And just that last how benefit some operational much – actions? year-over-year from to clarify, around of the that or bucket in was margin levers, actions

Nilanjan Roy

we've you before year don't fiscal the of can set that of and million target had but overachieved XXX savings XXXX, a we think I we we given this number. that out in tell I out against before, gave number had the –

Bryan Bergin

how deal two then how much here. say Did inorganic housekeeping I signings? you And of your within growth outlook? X.XX the XXXX included ones quick updated was is billion missed Vanguard have And the in much the may Okay. revenue

Nilanjan Roy

inorganic, in them of off we in of signing Number very, terms and terms portion. deal our a the the Many that's of don't very one. sizes, just have small two haven't We number is mention kicked it's implementation.

year. the that impact the rest very to of marginal So going for be is

Bryan Bergin

Thanks. understood. Okay,

Operator

Saluja Kotak. from line ahead. Kawaljeet question The of you. Thank Please next from the is go

Kawaljeet Saluja

on a and for is team Hi, management to question also the profitability. My fantastic thank on quarter. you opportunity congratulations the

Now, bouncing in I the has to margin the last in certain day quite on, years. four increase to cost kept you deferrals around an that, at the Infosys, led has this band for understand bit know, but year, three you the a end of know, band margin

our certain work a companies of with many Now, aspirational margin band.

So, more welcome? think increase? thoughts any would you year’s if current about, band one you Or, – assume you this know, sustainable on And, mean forward? how should should know, margin be you really the as that going really band I know, know, one the

Nilanjan Roy

Kawal. Yes,

prior you the – margin. XX% year investments in out on two to been think, making XX% very rolled focused that years we've on sales in I about and over in had to last side, impact which the clearly, the the the an because know, band was force we the So hubs, when new that margin the guidance strategy, this

the not volatile. most we need that and, improve as, XX you can know, you environment to was prior guidance that is for one know, will very continue an we've we part two aspirations we stabilized margins, go for of to be – the the so know, the sustainable. critical but sure get XX% stay come very, no you you to this things elements. normal, model parts to than us margins So, year confident of been ahead in will in variable that in deferrals, timers to show continue stability us, more can is which They years. rather Many Clearly, take many that was but are, to help our with leavers conscious margin XX% I making than continue steady the course, and well, as and to like margin always one why from. you ways more given are us, XX is And we mentioned, to strategic what exactly stability you will way in much moving of exceptional said, terms in and know, these, back in something a so

Kawaljeet Saluja

band that XX%] sustainable the going [XX% is did to Sorry, forward? model say you margin to

Nilanjan Roy

a No, going sustainable XX% can to forward. no take the no. I you is number that said there way XX% as

Kawaljeet Saluja

helps. absolutely that Okay,

is we are in a second recession, that The thought is are in – I you recessionary RPP and increase a with RPP. backdrop, in increase achievement. mean was the in actually, know, a living inside the remarkable surprised I I we thing the

you there? going discussions, when if know, RPP, of figure you know, You know, is I operations that a quite – the cost lot? yes, And you should know, into impact you really do forward? And a know, does that takeout mean, in that largely come client in

Nilanjan Roy

the RPP… Yes, so in

Salil Parekh

ahead, Go go ahead.

Nilanjan Roy

I’ll answer first Yes, one. the

The second, if, take. Salil, you can

Salil Parekh

Yes.

Nilanjan Roy

quickly first a the is one this bips So on multiple RPP, of is factors. the XXX combination

I of think impact a day's quarter. is, during this course, is one

not think moderated and in so, seen our the downs have two as see We improvement I ups environment. But I discounts as slightly automation, you productivity large like other so discount and said, secular, well. can are more is these to well always some always ones

basis can one. three, So outs other other Salil, you know, know, XXX the within you the you that carve large, take points.

Salil Parekh

a hi, on the especially mean Nilanjan Yes, in environment unusual, think cost as not discussions, stable client QX was has number Thanks. I the with What discounts The quite anything Kawal. it's point I sharing, is the with versus anecdotal. been been discounts. smaller RPP

coming into we're still some as but at large there none this thing Nilanjan of there's quite comfortable explained, the sort And of so, RPP, specific were stage reasons. in and that

We’re also RPP. on quite focused

method over goes that sustained make will next few find over it the time, of we watch sure a We how doing see should quarters. and we

Kawaljeet Saluja

best And Thanks, the all for Fantastic. Nilanjan. future. the Salil. Thanks,

Nilanjan Roy

Thanks, Kawal.

Operator

from the is ahead. of Thank you. The line question UBS. Diviya from Nagarajan next Please go

Diviya Nagarajan

quarter. quarter my on congrats taking and for a question Thanks this blowout

questions have of been I my think discussed. most

topic on which So me here, another focus your headcount. let is

trended your How you is million that you cost savings. predict strategic this that this think cannot of target? cost And of in we earlier year? I heard rest first pointed have quarter, that, question. initiative are know, situation. headcount and strategic the of there $XX How at quoted I that leavers that my – target out the muted in part quantify addition. see appreciate next the the that you that do fairly said That’s there seen you What you has are were I so secondly, looking Nilanjan you some far? that fluidity you some Could for given the please?

Nilanjan Roy

first want one, to you the On Pravin, ahead? go

Pravin Rao

Yes, is here. yes. Pravin This

with increase headcount, – in in the be headcount line obviously, the will the growth. On

India This we were fresher’s X,XXX had in X,XXX laterals. and quarter, abroad; and about additions; about both X,XXX

if of utilization, but side lower number recall, one much in the it the improved this quarter. Our and lower quarter hiring significantly, on was was you has

growth. four will be quarter dependent quarter obviously subsequent on in three, So hiring the

we in planning this to in expect are [XX,XXX] we India. In another XX,XXX This – onboard is to next mainly people. about about add year, terms And of people. freshers year, India, freshers add

Diviya Nagarajan

Got it, got it.

Nilanjan Roy

on on Diviya, question cost… your your

Diviya Nagarajan

digital… the on And

Nilanjan Roy

Sorry.

Diviya Nagarajan

ahead. go Sorry,

Nilanjan Roy

finish part. the cost optimization Quickly I’ll

we that. we XXX So, were exceeded million,

that I think But we above a this similar year, then bank. money this this flows numbers et are you of and, I it's into gets way well all compensated the wage of, cetera, said, know, doing price not lot like well hikes, XXX. so on our know, you by

Diviya Nagarajan

that number growth seen on digital Fair enough. you've side. numbers to the XX% back digital the Salil, kind And, steady growth a of fairly

in XX, definitely Given possible you where would spends for XX digital accelerating number looking you this the there's at how scope that next, know, months? overall, acceleration the in a see we're scenario

Salil Parekh

at $X today. That’s growth – growing Today, billion you know, are is one I that, are – which you think before But a factors, there pretty we of if it’s XX]. large, quarters the add our half the two in even – higher. one, numbers the close our big size [indiscernible] look our company numbers practically financial [XX, In of around quite quite over year, XX%, digital business to previous remarkable.

which of of in growth is type are there the what of areas, as terms And trend, traction. partners clients of constraints, mean – terms And which are discussing on earlier, especially services companies. large today in sets market the secondly, on other of we terrific of secular the doing. I part for what on So underlying data, experience, example, that cloud ours doing were terms are has the of its are a own good in in then, in digital

faster it So, a level at well. try obviously so way as we we, find you to this that drive have we have to large a size, but will keep know, still, also to

Diviya Nagarajan

the how seen, you we where Do But back was be to pre-COVID momentum seen taken negative and is accelerate. that one sneak I that out, legacy last trend to if the to of the modernized have about in of and customers start decline last two that continue. stabilize? you might they've in Sorry, core it kind of kind of likely could talk stabilize go gets core expect question, did quarters, just as therefore pace will

Pravin Rao

Hi…

Salil Parekh

On that go Pravin. ahead –

Pravin Rao

even think, can nature the clients I the to you you technology, them to of and take has implement agile. the legacy technology very and innovations that also any given advantage dip, more and how of reacting sense shorter Salil, are and for be take see be has to their can It to Otherwise, Okay, add. it's My a of tough spend a in is, lot will own I to on clients benefit modern. drive pandemic it, one realize get to their organization.

to So aggressively at what than do past. of expect much I modernization we legacy of least more continue the the have pace seen in

Diviya Nagarajan

best all Thanks. That's you helpful. I for wish rest the the the very year. of

Pravin Rao

Thanks.

Salil Parekh

you. Thank

Operator

next Thank you. Ankur the Rudra from question of The is line Morgan. from JP go Please ahead.

Ankur Rudra

Thank you exceptional an and around. congratulations. all performance Indeed

performance revenues question, very on know, deal and the Just wins. you strong Salil, first both

reflection the in just could unpack what's much more, you bit is of new share to helping a that? demand state a this and of play environment do you of overall the versus If gain ability how your this

Salil Parekh

Ankur. Thanks, had it we’ve is growth. way see year-on-year – we The

some share focus the extreme see we’ve looking We made looking on investments doing had on Part made that describing at choices deals, of is, Some working declines. our years over and own into digital going digital, an of helped last focused the earlier years, play. of that have internal think us. we're up has definitely I large scaling infrastructure, on at place, very it, what way we we Pravin was in year-over-year which put on our strategic and example, that localization, market re-skilling several for gain past

the continuous the to from completely itself digital business, has Part And, know course, increased trust in sorts COVID lot rapidly scale of of specifically is environment been activities a in investments you has helped this part landscape, also which in of the of to our is the traction to work-from-home as I demand come. well, it, of where and there's a for that. are inside has execution, a very our think, sort it the clients. us have it of – that given these with steady good shape, We

combination things at of sustains the we so those I So, us and hopefully, keep execution sustaining think are the and that far further. are which

Ankur Rudra

seen far offshore in out asked a on it up the won. to you're we've the know, on appears more, second odds that, guidance Is strength your and in? half this of first think building momentum can unpack something based to there slightly maybe the bit for conservatism planned you but a follow was this some before, shift to I so seeing be due this deals or implied the Just as at the to half, current the you outlook

Salil Parekh

effect of so seeing what the we’re good traction we’ve current we’re two a two in growth to the as very a revenue conservatism change And the points, moved closed it's Today, person's bottom aggression. you big zero revenue guidance increase QX Ankur. one on don't We seen specific I QX, which from plus had guidance. by model in as the a are to we to and typically, the good see other and we've change, think a three. all it's quite no big – We one and it. [follow] past person's terms know, deals is view a and is in around there We constraints Infosys described, We've have business a from pipeline that as – modeled we it view of see muted seeing that historically of we've genuinely any there quarter. two fairly

Ankur Rudra

think tailwind? try otherwise you market Will enter this lastly, situations it in pandemic you is the about sustains? clearly and this market significant just you strategically? wouldn't your this tailwind expand that addressable you, time think Understand. space participate about Is example, And to know, giving to for to margin if

Salil Parekh

answer which specifically would think would yes. be you’re But to I markets [indiscernible] are general be mean love in. the which we there I thinking, addressable market

as defined we today But operating nice other well. I look got margin presence build the and at is markets for we traction our deepen them given ones a our have well. a the our And can business model, what have in in quite good can yes, those in at However, would generically, we think see we structure them we future.

Ankur Rudra

Understand. Thank you. Understood.

Salil Parekh

Thanks.

Operator

question the Pankaj next line from go CLSA. of ahead. from The is Kapoor Please you. Thank

Pankaj Kapoor

major just or I Yes. a understand clarification, that? the when opportunity. with are said consolidation that that did talks Salil, the in the for right to way that is so we far, the any right clients haven't thanks heard seen you convergence Hi, relationship you deal you and something still vendor yet is

Pravin Rao

The quarters impact, moving. is – a seen stability work We've a of in It’s but over delivery, My is has business on which in an vendor big things company COVID consolidation, small in this there inherent discussion. from time those sense is on. multiple because and that stickiness, our there will out have play been so few things change home, perceptions this in pipeline. quality,

will not material sense we benefit early those time, out it, of my seen is, many So, of have over play but but a some benefit.

Pankaj Kapoor

Or the coming what that So and environment estimates end-user you any which kind in second of And potential second, building something macro given also you in what market? think your to band guidance that now wave of pandemic the your above Understood. are is factored have this over you reduced? could in be are? is

Salil Parekh

economy considered scenario we've in We second dramatic in trajectory in a global put on it. seen the anticipate not don't see that QX If and something QX. Today, model. we we that into something terms based a in wave have move it we have of how is the which terms is COVID, of

we one it year. quarters a course, QX scenarios and next on seen No be. Of and generally that's modeled this we've for how quite the financial that QX it's could we look knows possibility. of to what evolve this how But couple

Pankaj Kapoor

– Vanguard are like Understood. fairly take And it also large on dominating the [indiscernible] I Vanguard it? of look operation book terms the order being order size out book, deals by dominated smaller of in if the that is

Salil Parekh

the large We’re in say within generally as mega – deals we plus not speaking, a of addition large you decoupling the I wins size can number last within know. quarters What pipeline, few have is deals deals.

sizes number but of and loads they're of decent as them honestly know other there's of there's a a them, well. number decent You

Pankaj Kapoor

renewal it we exclude be would how possible And if it. historical ratio similar very the to Vanguard? Will our run got to be rate? [indiscernible] Okay, is understand that

Salil Parekh

the as is earlier months the percent at Pravin I or you if described seems XX ago it, pipeline, new number was to we for XX the number, little in higher think look look, net ago, bit good to way it. than let's months quarter sharing say, is, way see sure. is this Pravin it in – percentage, But that a the be general, in

look So, at the instead of the it be that sort number decoupling way to we would QX ahead. look of as

Pankaj Kapoor

wish all Understood. best. the you Thank you and

Salil Parekh

Thanks.

Operator

for today. hand over Thank management I you. question was for and Ladies gentlemen, the conference now closing to that the the last comments.

Salil Parekh

Thank for you, you. everyone quarter has this the Thank this joining way excited out. with really played We're session.

Our fully. with has commitment increase business Thank of we've has that safe. and and margin the the profile you delighted margin been can that's in to seen the critical guidance. address will we revenue digital of And that our and joining call. the for I clients. sure both in we overall, all and you we're confidence the with the given mean Take our our employees us care, been growth stay really absolutely most make serving from actions element And see incredible our the

Operator

much you management. Infosys gentlemen, Thank you this call. the and us. for that members joining of Ladies Thank very concludes of conference on behalf

You may now your line. disconnect

Infosys Limited (INFY) 14 Oct 202021 Q2 Earnings call transcript