INFY - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, good day and welcome to the Infosys Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Mahindroo. Thank you and over to you, sir.

Sandeep Mahindroo

Margaret. Thanks, welcome release. call and FY discuss Infosys earnings ‘XX to everyone to earnings QX Hello, Sandeep the am I from in Bangalore. Investor Relations team

us CFO, call COO, Joining the senior with this Mr. of on Parekh; team. Salil other is members Mr. Nilanjan Mr. CEO, Rao; management Roy; along Pravin today

in which some that with our www.sec.gov. to the I would these questions. read to opening performance risks be can up forward-looking refers call with on for of that we and pass the must the will of complete start With that, a it color Pravin in available which conjunction before We on company filings the A company note found Nilanjan anything that like Please say faces. Salil. call is explanation now with for is outlook the by the Salil, our the risk to and on statement future which SEC, the be statement,

Salil Parekh

and sequential constant robust the we landmark of that a XX.X% we have everyone families are Good today. first am of growth growth your currency and years. fastest in and Sandeep. for quarter on growth XX you X.X% terms. had you This with I of and trust been morning well. us with share you Thank have evening delighted safe I joining Thanks, call. year-on-year each the good to to has in seen

with wave that would This for in Infosys’ another stronger differentiated thank a share dedication a of significant contribution, area their to like COVID clear continue the with to in grown growth employees relevance during of commitment unwavering all essentially transformation. India. our of and period has second and and market especially gain digital and this the is client resilience the We being enormous our testing organic portfolio. employees I of digital with especially reflection

of were is XX.X% in sequentially are: billion, constant highlights year-on-year Some $X.XX currency. results growth X.X% of of our which revenues the and

overall grew Our had service XX%; by and growth geography grew services the all XX%; American year-on-year across our We revenues. manufacturing, by of sectors, XX.X% XX%. digital broad-based XX%; business our geographies. North XX% XX%; retail, by lines and sciences, life Financial now constitutes of

large $X.X are value. million at Operating billion. at deals Our over XX.X%. were $XX deals was deals Large margin in strong

increased We have XX.X% flow well-being new cash employees, the talent related have and approach we a focus $XXX the tremendous at talent that net XX.X%. on quarter our higher X,XXX, strong support headcount market. to attracting the to in ability a employees. to journey. transformation clients expansion comfortable We million, of with with same than especially Free was previous to in We Attrition our had our year. digital increase leading the from their the remain

helping move capabilities connect new customers, with us differentiated with is approach speed, constructs. value agile Our create and digital with their our digital employees partners building to clients sustained becoming in enable as they and

on in XX%. are the to to strategic year, example, the growth at of was Infosys XX% constant with to We which increased we are a to annual good specialized XX% and solutions take QX, start growth deals a For cloud Cobalt advantage priority cloud. guidance our the currency. financial to increasing large XX% strong it revenue pipeline, in engaging more becoming businesses, clients industries across us services for With strong with

the have leaders let support shape margin me week, Infosys I’d am their operating that unchanged I and XX like for XX%. clients, transformation and the the company all stakeholders guidance, being their partner journey. are it our all our consistent vision in to to years. contribution. with to digital to growth share for shareholders at turn our Last With contributing founders, over ongoing XX% and being a Pravin. helped of founders thank strong that, to and remains completed clients Our well-positioned the employees, and guidance to delighted you us

Pravin Rao

of Salil. by healthy. returning second India Thank medical everyone. period and you, normalcy. situation concerning are to you Hello, pandemic, extremely the Hope well, wave and of your caused is a After family gradually safe

We have help overcome situation been extending to our any on extremely focused well-being, medical every employee of employees. possible

quarter than We shot. far, in year-on-year employees least one, have their vaccinated Growth currency We growth of constant and acceleration up vaccination XX.X%. so saw at was industry reduced continued segments have of further improved Operating more broad-based ramped and all-time services improve sustained retail low drive to financial to Onsite reporting with X XX.X%. strong one further the our for families, and growing growth, largest employees XX.X%. India, growth mix during new we new Utilization XX% parameters in with with a high two to of year-on-year. the effort XX% of including double-digit quarter.

deals XXX in to from count year-on-year. XX%. X an X XXX growth with increasing of rest was metrics of also XX, XX billion, in to due from $X.X totaling quarter share by the subcon in meaningfully stronger one bps large of than increase life skills. high The Region Europe, high-tech However, new quarter new in in X X-month Client deals segments. one, added world in in for has top demand last were X XXX X increased from wise energy, financial increased last services, We and coming X won quarter India. and sciences attrition X improved quarter to communications, one. cost and clients attrition for were increased. growth, X XX utilities, million resources each deals last talent from and Voluntary retail and XX.X% We XX.X% new the services, back, clients Americas, and in manufacturing expected from With demand quarter.

completely, at the backfilled strength as is only short a attrition a on employer. test not X,XXX to which employees status basis, we recruitment also and added However, but a our engine Infosys of per testimony another net

acquisition talent retention. and taking both are enhance employee measures We and improve all to necessary proposition value

XX,XXX In on-boarded over in we we to due strong target to XX,XXX However, attrition as demand. and ensure graduates one, we unconstrained have globally college year, college graduate be the deliveries. full client to high expect to for quarter the hiring the increased near-term

salary As employees. communicated off our for revision earlier, July from kick fiscal for will ‘XX majority the of

business the to like signings industry-leading momentum performance aided Growth by mortgages, wealth is continued led retirement banking, quarter. sub-segments during steady growth financial segments, U.S., in in services with in services. increase Moving by and especially

payment gradual opening are our cloud-related and visible With cloud the clients economy, working There seeing platform migration, also on we management is other deals. with in significant many in the cloud adoption cloud of we are and the improvement acceleration sector. of

quarter plus we transformation capabilities, both a the as combination full well improved well deal ramp-up are signings With with during digital previous meaningfully the digital ops plus stack of our positioned deal of wins. Performance as tech of player. plus segment as the new domain retail

segment the omni-channel improving deal. better huge to are quarter for and is prior to need build We aggressive improved with seeing up tools of structure. signings compared by seeing promotion with of With are a that to one for combination drive the area native analytics help traction continue in to of trade supply of world. ramp capabilities. to new performance fast connectivity, we due digital cost the accelerating previous deployment cost. the investments them COVID XG analytics the using fulfillment, chain, across Communications invest across a Clients opportunity to their and digital There us compete clients uplift capabilities their right-size personalization

Infosys faster. in segments. Growth grew and the We spending is from advanced adoption, in like see geographies across areas digital quarter. integration, resulting with across energy are and through slowly efficiency emerging sub-sectors products. past cases We back in wins we levels IoT, on chain with segment industrial. resources Clients on and improving aerospace customer smarter The spending, and during involving experience, operational pandemic becoming in working normalized important with the and space operate. manufacturing industrial transformation. the opportunities few associated impressive is to areas double-digits, outlook legacy in all our the increased manufacturing discretionary are vertical incidents trends IoT especially and from utility, with services use market sectors overall was Cybersecurity getting customers making cloud value automotive, share deal recent of also in utility IT/OT along various the Energy, in strong and in wins strong tailwinds grew ER&D deal quarters.

we earlier, to continued deal also Daimler to at double-digit segment grow up sciences Life mentioned ahead. start expect As weeks ramping rates. in strong the

experience. of like in across the accelerating further medicine initiatives restart to in a Our digital patient recent one, platform in to XX.X% commercial growth drive constant chain. pent-up products offerings Sales pharma overall currency strong to XX.X% digital personalized engagement help for to in of analysts. hand health revenues last the of very XX services, products addition to permanent of continuation solutions a complex with adoption With and they recognized will have across delayed and drive panels towards to digital and industry digital I ranked that over in business have are the tools. they cloud transformation be supply service-related and full of enterprise and customer that, Clients their by the leader In service was Nilanjan. going increasing Infosys some quarter, to chain in and insights for increased biotherapies, terms. is would digital There to digital are efficiencies commercial year-on-year made their investment capabilities adoptions modernization, demand pandemic-related value infrastructure quarter as intelligence platform help artificial

Nilanjan Roy

for joining I you the your you trust families and each call. Pravin. and well. everyone Thanks, and Hello, are thank of safe

XXX acceleration growth driven and $X.XX the quarter primarily significant quarter to XX increase year-on-year to On of year-on-year. currency XX X one well-being in due increased quarter We compared terms, point XX basis. of a continued ‘XX. XX to the which a for Operating was and QX was components in benefit was by has which actuated another DSO stood the due over a other was ‘XX, quarter margin in peak in on And the flow one ROE XX.X% costs. Consequently, balance in increase am to employee relatively to EPS a to pandemic-induced on XX.X% of billion net policy. lower a clocked Yield and growth and year. ROE quarter one QX impact. to billion we the in consolidated ‘XX back yield impact promotions, point compared currency free for points robust by XX.X% years in the performance, X.X% at investment were last basis years. day is I point XX.X% over X sequential terms revenue XX X.X% of impact all broad-based by with capital due four as was and utilization. quarter by basis constant the a compared improved collections. in Consequently, increase we one in costs CC dollar balance X.X% in costs quarter an growth to XX.X% X.X% strong and The grew returning and due hiring, basis final growth, XX.X% are year-on-year FCF to share basis, offset related subcon initiation has to benefits highest cash XX.X% third-party quarter continued and to benefit growth whilst allocation four. generation, to any increased and XX revenue increased of in over retention by began cash basis on XX of in points in on quarter and higher increase points encouraged one, buybacks. year. was decline. performance, in quarter in $XXX The a INR This robust profit. fiscal last movement last approximately of Driven which sequential conversion cash back XX these basis of major is movement, million to At that cash quarter one basis the happy four one the our being revenue X.X% growth healthy last years. after a $X to XXX% dividend quarter by by

had initiated of XX on We June buyback after of let of crores share one. the by size made AGM or INRX,XXX the about the approximately INRXXX XX. X.X% June till securing progress the buyback we shareholder crores of during Now, on on quarter plans. Out me maximum approval buyback XX, talk the end completed June buyback

bought price period, average we X.X date, of shares million of have shares bought crores price this INRXX.XX. and During average an Till we INRX,XXX buyback of an INRXX.XX. back completed at X.X million share back at

start discretionary As the two, costs, rollout expect to including facilities, of is to pandemic quarters. normalizing the compensation in of businesses the parts to majority situation quarter will and hikes the etcetera, our travel improving in employees. slowly many normalcy, of world In some we we also coming return

costs employee we retention, remaining in anticipating market well-being acquisition relating continuing weaken talent and short-term. are the With the to

structural signings, and of levers guidance quarter XX% improve However, remain to given margin previously. one to open on plans our in we backed by the pipeline, guidance XX% to efficiency to XX% for robust by to With strong driven for our of that, the call revenue from visibility, Driven the year XX% our we for focus are deal by XX% increasing cost deal confident can full we a structure, year. growth questions. XX%

Operator

Thank much. you very

from begin We first The session. Moshe question-and-answer now the go the of Securities. question ahead. Instructions] will line from Katri [Operator is Wedbush Please

Moshe Katri

on strong congrats results. very the Hey, thanks and

the wage the and is lot. that about picking half the up. do some pressure and at that year? on levers of margin I leverage how the most get assume morning that’s comfort are And picking EBIT should look the a And normalization that’s we around guess guess a less should lot Maybe can there that Is second in bench? model. margins given talk we this way some bit the and focus the Thanks in of this So, beyond to of questions model we have inflation you that margins a up the of attrition I getting then right is maybe it? the range on to the XX% sustainable XX% were

Nilanjan Roy

Yes.

changed year we as the of of clear to think back there we I guidance of XX.X% coming be at given beginning some So the headwinds which and XX% this we that Moshe, the so XX% last we year, on we look were ‘XX ‘XX demand think up. I very in and I has was as impact would had terms has that XX% we our the that up. it’s an clearly got on as has of articulated etcetera, said to really discretionary been slightly a travel that’s in deferred demand levers fulfill like costs put were the also will hold. it goes long had some margin that supply chasing the always as why, promotions, of facility, the which and supply in the demand, which clearly be than like factored say into to And headwind it’s into can on better chasing demand course hikes during FY that comes. had wage And benefits What because FY picked to XX% run, costs, work one-off and our have continue better that other of We optimization much course, guidance well. cost

other course, the that in to fuel at right, cost look automation, help help to seen going graduates, retention have in subcons. will the mix And us pyramid, of But optimization. now just announced us on some the year XX,XXX terms and college during etcetera. headwinds these we avenues costs will we instance, impact small offshore up, continue of we onsite of We take for

on but should our them that hiring whilst the I we short-term etcetera, some of subcons, XX% see there. I maybe we think to confident there So, own are once is quite impact, that, some back comes XX% in think benefits like

than situation think chasing So, overall is we a mean, model, our like important the around. is XX% to confident supply, I remain rather if I want that within quite the is to I way in we demand thing said, this XX%. be the in most But really other

Moshe Katri

digital pure-play the especially some Understood. digital part pricing there? up names sort commentary almost on some the given fact seeing you’re from of a from XX% we Thanks power the coming out a that of And of of based of lot. revenues, should assume business as just the follow-up, that is any

Salil Parekh

Yes.

It This of very impact, a is which transformation. is [indiscernible]. the lot optimization, the one is brands. from the that with the towards I transformation, is, be demonstrated of insurance. to consumers way, to digital extends part to interacting support fundamental spend that And that to think I transformation fundamentally retail. a you course, other the mainline new And digital into So face can in to on basically nearshore, And any about are speaks realize been services, transformation brick-and-mortar financial this there manufacturing. new entire extends savings how which, fueled not cost clients two and whether fuel is, structural can and course, workforce impacts a our as COVID the clients lot trend, offshoring think the know, back having come One work ability the just to world, requirement has we of And can very, from of of pandemic. of world. and that this offshore part the whole any the our the of

right, And in some for is get able over started pricing. next ways we clients. to linked to think we about way think, it’s This that’s towards very also I a now think kind So at is clients, the more us our the more can level, we logistics our of structurally, we in on value quarters conversations of help more pricing, in about whether outcome not around retention to good this positioned on the supply are just the us, of be very, we side, may way that the few And a the doing. news. linked for that’s about also, lot tailwinds the but of how And priced are work it’s future, very ourselves our navigating we are deriving value where – side, demand more the results and and chain products innovative clearly this. consumer it’s the just and

Moshe Katri

color. for the Thanks

Operator

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

Diviya Nagarajan

guidance and congrats taking and question very raise. for a Hi, strong on the the thanks quarter

I on to I’m you understand pricing pricing pretty the structural FFS a environment stable. why that my think chain? are That’s that earlier a first how of supply I the that or pricing, question. we noticed value wouldn’t Salil digital better to of movements question part pressure But Just less fair a on across there is the is trying pointed strong much in and was fact more seeing be given demand pricing. has talking every out about conference, amount the follow-up

Salil Parekh

Diviya. Thanks, Salil. is This

also seen make from point how what of QX your – interactions, opportunity past and the the to I an pricing was portfolio. here clients. sharing point the with earlier question question, extremely differentiated was terms we in we press for deals And believe see conference, you the of power think terms as that creates we’ve see some building and digital think pricing in we I believe in that, on in have the value large the lot our previous a you, Nilanjan on is we what of

We that and we are very in value. communicate active sure making that demonstrate

time talked comfort over that in see good that now all that, the has our for how past. gives to also the strategic because we’ve margin. create We us about, among concern others, value, XX that’s about because the of Nilanjan feel the levers – on but of one to XX We of will talked guidance digital We band, operating translates. supply want also don’t

gives more the that see leverage supply especially We reflected in the plays out what in in will business. that we see with become of will how course, us if the future, constraint, and that

Diviya Nagarajan

compared new what noticed to little done I Got last that a few were you’ve deals it. the the in quarters. lower net And on the side bit

deal could While year, for TCV rest see this the how the is you on do please? the your of new and appreciate fluctuations, quarter I you do a net pipeline have

Salil Parekh

Diviya, you’re absolutely right.

longer as pipeline look net to The the portfolio. also, good and is good stats we these that is new overall on of good saw strong. are frame of into looks number. where last course, looked focus There think expand focus we on annual on continue new I really and a those we significant There time we deals. the ensuring sort was fluctuations. at are year We quarterly

change to visible markers that. no So,

at a probably will net new something factor. replicate past It into done the remains to critical We where in proactively the has we’ve pipeline. look been years what look we few

Diviya Nagarajan

just deals of three? Sorry, Has last in gone the year pipeline quick to the follow-up a number the since but quarter that. mega in up –

Salil Parekh

the large increase. don’t from is it, comprised and provide is there, the Suffice on we we large. it quarter, of different that that very previous the deals, mix the, say color the more some pipeline the of extremely call So pipeline. the And types of overall value continuing the to let’s increase the see and specifics to good, of of a the pipeline large medium – nice

Diviya Nagarajan

to you wish come And if the follow-up, the year. is of the you. back will time. all there Thank best I for I rest

Salil Parekh

Thank you.

Operator

ICICI is go you. from of Guntupalli Thank Securities. from next question ahead. the Sudheer The line Please

Sudheer Guntupalli

of course, of talking years, start market COVID competition well, and, Yes. is great Salil. outperforming even the back Infosys decade Good next couple by talking start hoped the a from to share for. a the have position was – would in terms of out you about the evening industry the to growth been as competition. has pole pandemic Again, margin. confidently DFC until gentlemen. has on panned way been in over Salil, But gains of last have And very question and wide My about the Congrats also, IT of the on one really the holding quarter. after first Infosys growth. not before

you again over sustainably how on the driving So once confident the the position decade? pole next company are to

Salil Parekh

So thanks for your question.

XX.X%, is really are fastest I at this the years. the looking XX, organic we growth, past X.X% think essentially in that It’s XX this is growth. the way

feel extremely well are good because market. good that’s a that’s clients and of that Infosys preferring test the ultimate metric in So as, this we course,

to portfolio outcome. that quarters is a last of employees combining the period over in us So digital and difficult dedication extreme that capabilities we give very that have in our that we comfortable this feel built the several

growth. relevance, the focus metric the and outcome client remains is on therefore, So

see will time. We out the how position pole thing over plays

Sudheer Guntupalli

around, the this the some entire we looking will other confident the leadership? up, and are not question, the second decade, whenever my say over Yes, of in it of the hiccups. time industry focus case things be that, Salil. we started terms will exceeding actually, be And How previous

Salil Parekh

you I Could just don’t repeat can you question I can so the follow that follow – question, it? sorry.

Sudheer Guntupalli

Yes, I hiccups. be over the we are decade, But time be the saying things started some risks. focus any industry this on was it we probably up, that case yes. of around not the and whenever will there confident entire will No, will And faced looking previous other the how leadership. not be achieving such

Salil Parekh

there, a follow So little unclear bit with keep I it, to it’s is sound, the still if our I clients. mean, focus our to attention

We have Board minded leadership broad extremely leadership. good team. The really team motivated to guidance is the extremely give support very and and the strategically an supportive, and management

clients is sense our we will own the follow and on to this digital capability the my rest keep that. building and from So attention

Sudheer Guntupalli

the Salil. best. Okay. Thanks, All

Operator

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

Pankaj Kapoor

of had thanks first optimization. mentioned Hi, is the release, I Salil, TCV, that you question the now cost think from on focus opportunity. the my shifting for in is this new deal press away also clients net

as TCV So for mean of the clients new net terms deal well that maybe is it does deal leading construct? deal what taking on to to decide – a softer us? the Is the that as longer are on in now

Salil Parekh

on to changed of bit moving What are significant that looking on terms cost is of markets But is the the transformation, their is that is coming Companies nor of the within opportunities, on the maintain are end also and faster of presence sort view of the our working up accelerating, the they see and where consolidation. lead to criteria at we’ve amount of types sure seeing little that pipeline from. different in which a digital in to through economic lower in digital are discussed as clear presence we seen already which digital don’t are we efficiency, vendor clients had allowing for terms is Companies catch we transformation past the program have the we’ve which back industries time which advantage. do industries many up Quarter-on-quarter go also, making movement, What broad growth some percentage deal of in always relate has activity going down. see companies pricing. deals in line which areas has rapidly, is

of technology positioned things all are bode spend. spend we those well technology for nicely where the quite in So that

Sandeep Mahindroo

your was answered. question Pankaj,

Operator

think I his lost he line sir.

line go to of the Ambit Please next Ashwin ahead. Capital. Mehta We next question the move The from question. from will is

Ashwin Mehta

Hi, guidance, the thanks so if I of contributed in opportunity. the and press in has question even numbers for I to till in for presume now the are terms the Daimler One if deal, that the revenues appearing that not build pretty or that appears over to terms X.X%, between in implied the conservativeness building CQGR next three a us quarters makes be some soft that we at of guidance little in cautious are X.X% we to so – our anything here?

Salil Parekh

the XX we on quarter increased to of the in in XX. it the course, also past. respect XX to respect our we’ve revenue to what to going is demand by have done, to XX So guidance, and think, It’s, with growth points, and that X with seen demonstrating you’ve this as on I guidance, confidence the outlook on deals

specific what in that the but quarters. we comment, revenue their in mix, I see any softness I don’t we and really On will say the won’t coming clients see

Ashwin Mehta

Okay.

where Thanks Okay. from further, you do supply will And the think quarter, a given are? side lot. increase get to you they elevated are more, you’ve that expecting the pressures you expenses and this subcontracting the just or pressures – one further added think attrition largely fact do

Salil Parekh

we attractive an sorry and, have extremely net subcontractors, quarter over the with of today – attract the sure next do fulfilling the ensure What to we is talent added quarters good forefront to hiccups the we managing saw well are demand. make you as talent. this we to we the at to are with will course, of in on that where, proposition, So people extremely additions, the X,XXX come

be subcontractors, of margin whether terms that don’t levers the in or model it’s do all flexibility cost given plus will to XX. the levers and our that, to In down, of our that, forecast ensure we or have specifically guidance that we XX of up we to range have but

Ashwin Mehta

a had correctly, follow-up just I heard I what people Salil, getting this, added. it quarter. X,XXX freshers to onboarded you were if XX,XXX there this around From Also, heard,

So to seems in be of and time terms possibly essentially, the becoming hiring take largely they’ll pressure, productive. some

will near-term, the lateral you are demand much to fulfill we think, more be do skewed seeing? towards So hiring that the

Salil Parekh

on entire XX,XXX, bit little the seeing while think, a hiring of the that there you’re pressure of attrition think the have big as a figure X,XXX pressure well is lateral lateral and I side. I caused

So strong in that sense, we have engine. a very

that’s in cost that of way is by a a the in is subcon. the And laterals. the way, pressures followed case, in after one first The top-up then

to who with. we our due of So I a And is accelerate. have Like and structure, something any in met door the out therefore, about very, lot outlook but is of not three talked clients. all very demand I absolutely meet we’re seeing as quite etcetera, it’s we I have we And course. mean, now, our thing important the I that then good demand right. important let to down we That think comfortable out figure get subcons, mentioned. that’s we very critical. said, cost strong clients earlier, And the of are and

talent, remain new and a very for to We a brand proposition continue have strong which choice we that’s of

Ashwin Mehta

all the and Thanks lot a best.

Operator

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

Keith Bachman

the to wanted Hi, year. the for about current thank fiscal very you ask guidance much. margin I

already XX decline of the key reported wondered the year-over-year the from XX, you down take you just could what for FY ‘XX. guidance are to range I for drivers if you break If what

bigger other is there is guidance the you of impacting could large pieces. so really the could margins is new for and factors trying have kind wage versus much just inflation ramping If comments help that into down mix a as the I’m particularly wondering year And you deals. understand. such of what I’m please. us understand break any the then question, to how if of And follow-up I And

Salil Parekh

sure. Yes,

like we normal. discretionary deferral promotions. quite it. this up as the as year, although some was into the important, guidance benefits, of said, spend in down we starting Facilities back earlier We a to a at therefore, year, this Travel pandemic at the headwinds last with started the spend. very would our the And at reverted coming back were I the our of January XX.X, the the I I about year talked of hikes would these more that XX pay we’ve range in. right? when lot once home, again, many mentioned distribution had go we headwinds call, to like which And were was guidance I And the It the clearly to into in up, FY of coming from as XX.X beginning factored in pay ‘XX, moved July, therefore, sharply. and people given these versus right? firstly, of saw way clear So of working think, costs came before XX. these of fall this like And in costs of both we rollout that, than one-off it’s reflective to we in comfort XX the XX of FY ‘XX hike marketing, even think

our are in very, But a pyramid. But very the cost both to know margin mixes, we always were an taking projects this, on-site basis steep We continue and wage mixes. The redeploying wage the our massive we we of deal is we impact on-site The of within automation Yes, on largest people despite XX% wage on or the player be ahead, the pyramid. deal don’t margins. in onsite we’ve wages. factored we will in offshore hikes. IT the impact comfortable terms services very are on which nevertheless, number movement very out the a companies split As most looked year-on-year of to in lever creating think unique Historically, XX%. employ from is optimization I them. one

our Our flatter think geographies. U.S., the a six we offshore a businesses, much I in what helps build the pyramid us in that way, in mimicking more mean, hubs I nearshore have

of outside We India. going from are X,XXX hire to freshers

are will some in the wind So, headwinds coming us terms out our future way. help all of in the of these of taking which these

Keith Bachman

through me. it – look onshore mix we you as to you that onsite or same where it of move more think year? goes as much. I on continues or fiscal might moves about unfolding, lower is becomes that think higher, if your do for the favorable thanks. the here you unfolds similarly, balance year do you of mix That’s up? year? is, offshore you thank stays does follow-up how move offshore mix to And so And Many my stay very how the mix the that question from the Does comments has think toward onsite about Okay, any as or and move think attrition could the attrition continued onsite similar lower,

Salil Parekh

I a realize a I think the for the I than new therefore, – way it attrition, can I somebody somebody good Fundamentally, up. Yes, is that’s it takes like fresh said, supply is fundamentally my the else’s it’s else’s Otherwise, only think other that through situation saving net around. my news the And be and to industry to be supply rather industry. on where time would of for demand And lateral important chain the the demand accounts, was attrition [indiscernible] is lateral. catch in way right. attrition

freshers mentioned the fundamentally, had six as freshers. ways only the only is So that – It the In we freshers last Then demand out. the serviced getting way the you are historically, of months freshers this demand we through new college know, of be we we call, freshers. has are suddenly can would most now surged year looking XX,XXX or as contracted campus is a only at take that we on.

will parallel fresher program which started we hiring We have new a it. XX,XXX campus of completely freshers through up upped service and to that

terms gaps be So, news, supply demand, think you said, this But good will large in this of – in of gaps I chain short-term of across. like the are sort which adjusts seeing the is there is when there I itself. some fundamentally, exposure it

this – laterals. And subcons already through or through despite quarter. So the attrition, the to in are in have sense, continue or attrition through high is that the hired net feeding it fundamentally X,XXX job our demand, freshers whether is the we I think we

The the part last think, years. yes, of over seen I again, have the massive second was, change X question this we

have as the to and think that opened secular But of definitely to in probably trend been from the from again, to this has easing travel, see year I long run our bit we XX XX in etcetera, came COVID can big performed able that be XX. And work up. It earlier in across been have necessarily it to XX it about doesn’t a be talked zone of it front have zone, seen a X the in on-prem. the performed They the be globe. was with very their can long have can for them – time doesn’t listing necessarily in to That workforce. I time outsourcing own think think that would of is within Firstly, we it see and little near-shore. run, locations, be positive It onsite, continue it And clients that’s, out different guidance same the It same should us. very, industry. offshore. impact I

these can as the short-term, So, we well. in think But gaps and there be stops secularly this should improve.

Keith Bachman

Thank you.

Operator

Please line Thank Gaurav Morgan you. go The question from the is of Stanley. ahead. next from Rateria

Gaurav Rateria

on congrats execution. great Hi,

The BFSI. question is first on the

the recovery to is Services whereas sharp America a Financial still level, seen about same compared We very pre-COVID level. to revenues North in just Europe recover have

that it helpful. the concentrated in America, a is gain is So, share why is dichotomy? Any be fair largely North there to entire market would say color on

Pravin Rao

has America retirement services. big part and wealth primarily come sub-segments in of growth Pravin is A this definitely and banking, Yes, and here. like from South mortgages the

Gaurav Rateria

Hello?

Pravin Rao

I I most the mean growth I had am confirming thought I from… of has Okay. that been responded. primarily

Gaurav Rateria

dichotomy and was why in there between Europe question is America? the North My performance

Pravin Rao

do won it’s Europe. as There with well. is deals. delay banking And ramp-up a in some lesser demand some think in have maybe I in the No, to the mostly plans in of cases, we

a in have space, the when much this think have U.S. and stronger demos I growth at last times we trend quarter, And because, of growth we very have been strong period seen So, side and there it’s in by consistently. the there have growth secular Asia been equation, we Europe seen Pacific. have in when don’t times led

mean think don’t I I not it’s a trend. – So, secular

a Europe. question any specific seeing not with more delayed or plans that. like ramp-up It is are in and of anything We things any softness specific

Gaurav Rateria

Okay.

drivers what Second growth question upper the you is end – are continuing Thank you Just coming would the those really that Is key end variables be What digital on which it the upper of the the two the upper grow are the guidance. can factors? end can going of of at kind for towards full the or take year? to of margins. the guidance? Is guidance understand you. the three to rate? to this What trying to take

Salil Parekh

is quite have and XX% overall be the going this. we given think I to remain that, quartile what confident XX% of operate to and not guidance of to we within

well known. Our levers are quite

We mix, have pyramid, subcon, the automation, the mentioned operating about leverage.

last itself of on benefit operating You line. are seeing lot a leverage year over of bottom the our

been to any are confident etcetera. that, it’s have multiple we quartile us, I there And stay without So, – quite said, within giving for levers. like targets,

Gaurav Rateria

Thank you.

Operator

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

Ankur Rudra

the Congrats start you. of year. Thank a on good

to at the land the in to question, are optimizing flexible would compared a first we on that environment and want you plans the had growth year? where at think you for investments the looking more do On be your margins the you of demand bit start how

Salil Parekh

approach just more not part a see programs. that, is know Salil. see make we, is for I the we is which capability what Ankur, available fully trying automation have respond demand to strong. are make to deploying confidence fine-tune a we and the place gives levers their I this us well, Thanks from, them band. is not we have And picture, environment question. clear, further that is That’s and am up, which earlier clarify. they this those because programs to optimized. today. demand doing fairly the that. that, is clearly follow digital that sets I our Where are then then first clients to work you stage, sure so shaping fairly sure help several we but in shared What that sure Nilanjan with very we will And that Within little can can have well, extremely it, holistic the our the levers approach driving built We will at of of you or in the this less. that go clients we that to as bit as are within to we call if margin in operations toolkit, wherever that are land it the our we work, each that start tool with are

Ankur Rudra

Thank you, sir.

margins for more question, came of earlier planned which opposed as bit example, completely you you has lower optimizing my hence, a said, not demand chasing in you being part do addressed margin. I what are to in what in flexible you and for the think think, versus had been was XQ

Salil Parekh

of sense are – on is we – example, year shared actions the year, year had shared, outcomes were giving no Nilanjan the and for last my I that There know us took many think over the many the we last were travel. had I of also onetime last benefits,

that things line where fact several moved has the Of in more April, last much we to year cost course, items other offshore are going. a way. timeframe view a in mix the different on-site was reduced May secular The March,

planned those were previous which salary the to our year, we in in the was even going different. July, the XX.X with we because all to the also than closed originally out of So We started XX, second later margin increase that of as year coming the up. XX be could minds, we see didn’t we think, salary increase, January, at done least had

because So low. in that you sense, margin we are has something call not in come as more chasing changing, this it,

stronger. We margin year. the has we have The this view started become demand of outlook actually as the

you are give client within in want feel seeing having could there anecdotal, of it client, a which team where XX are to all of are working, expansion, I and sales add are one that we coming expand way example, with two to my those was client what our XX%, we up. is be ago, discussion where discussion. of they this just us clients lot Within So, sorts we what portfolio. deals To colleagues, we us. in activity weeks these are a started and one with And what these XX XX% do to the

what more us margin lower the the growth because increase are confidence gave the that guidance but to now we chasing expected. was So, something than we

Ankur Rudra

I appreciate the color.

think the having one you you follow-up, situation facing is, you bearing had pricing – you client and I supply on in part that impact the quarter, signings a the that’s And are is conversations behavior on, the is in any elaborated supply the if that do situation from which think that competitive two part an on one. having can, perspective? Just do market,

Salil Parekh

this we six clients look, are look have us. up What seeing and again, the in with would rather real feel back last quarters, you five something is of benefit that clients any without we or constraint, many supply and who the delivered I consistently and we a you situation, if supported we scale have over and really are heard so from seeing

to a So it, which has coming an we it’s attracts brand, incredible feel in have, other the Pravin shared to forums, put I us however as because benefit situation, talent. supply we

a have incredible capability. those That to short-term And see. things, all what in you things helps are develop talent, training these We an bring clients quarter. cannot over which not the of us

supply constraint we is expand there still because there are is and, seeing yes, demand, our growth huge a fact, a And so but improving guidance. growth good – in

Ankur Rudra

you. Thank

Operator

the The ahead. go line next Sandeep of from Please from question is Shah you. Thank Equirus Securities.

Sandeep Shah

the margin. to, sorry again, for the question Yes. is, Thanks opportunity. The harp on

this price wanted still of increase all-time high. look the looks is come utilization it high, later of at the guidance factoring going Just guidance offshoring is in in is numbers, understand, I if of into not wage year up, at amount this? hikes part some attrition financial independent or the at all-time even Because margin to the maybe the

same this a continues to has wanted And read just same? up those the cash So, at to on look Anything to…? bookkeeping Q-on-Q guidance free I is basis X point. flow increase quarter revenue by some of pricing the in a it’s generation independent in or the just taking understand If gone in percentage unbilled the second, question.

Salil Parekh

Yes.

And for like the the said, into think we on to are headwinds built And I as I how offshore, margin the and the basis, that pricing, XX quarter operating think which all I models we levers, I quite of at ahead. our have, is come side, on-site that on So leverage. look of comfortable in range pyramid, there subcon, some cost are we continuous these and well. XX think

So, think that we I that. are on quite clear

And see unbilled, starts The is one, think always that. second out. if usually, some that quarter tapering question always, in we the on I which see there seasonality you

overall nothing seen have So, free the and flow. we really cash concerning

come down has as well. DSO Our

So I yes. think,

well, same think we percentage as I of are on as year indicated. we previous the so revenue, as

Sandeep Shah

in you Nilanjan, on some just the ‘XX? guidance FY So for margin, increase so, clarification, a in are pricing your baking

Nilanjan Roy

Yes.

pricing environment of like – know pricing. of fee It’s fourth going So, to is not the a the in going. know some lot on quarter. things We what’s the to the I initiatives be

them Some will come through. of

new will Some of pressures. some come them cost they won’t will be through. be There There other levers.

it you dynamic industry and our work. manage what what work, to continue of So, have very use be in that don’t you to can very, put to and probabilities

some – will Something levers over-deliver.

we Some factored forecast will as the under-deliver, so all is in year ahead. that for

Sandeep Shah

understood. all the well Thanks Okay, best. and

Operator

the Mehta question is Emkay next of from The Please from Dipesh you. go Global. line ahead. Thank

Dipesh Mehta

Yes. a opportunity. stronger Congratulations year. for for Thanks the

margin the related. about is question First

trajectory, now think margin Second which considering understand to if of we we environment, very again EBIT like projection? this related Daimler XX% can is term, that kind perspective, now question Now for revenue in historical deal and versus to be strongly XX% define margin to what digital growing can from of impact one plus deals, [indiscernible] quantify more you overall confident But QX? do is demand the our strong half will the and Daimler want also long-term medium than are to we year. XX% Thanks. achieve

Nilanjan Roy

question, in of XX% break we well. look And look is our We We impact talked Daimler. that as all to We factored about. out levers margin guidance optimization the various cost the deal large all in. at don’t Daimler projects. at On the to across built XX%

On the digital, the question was...

Salil Parekh

with digital, – this On Salil. to respect is

margin. average We at the certainly give digital business is us than our today. it’s company your because question think becoming to higher a was that margin larger, higher that a the see have different opportunity I will

the are as we that is financial for operating And for year, guidance the However, shared. levers Nilanjan giving as are margin, of increased several course, are which this to well. there cost many there XX% which areas XX%,

out. at any All And particular the the of those year. number different year, at we this balance on view stage. that provide we for But this will end will have view don’t the of following

Operator

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

Salil Parekh

you. Thank Salil. This is

this a first, So to with good I us see thank of environment. everyone, a of to And to side, and from way to the XX% reiterate just we couple we session. on year. for this the you One, market, the points for increased we demand the growth we discussed our have guidance – XX% joining see want all have XX% with XX% points. for

we costs have that’s it’s demand of whether on and pricing in travel mix factors employee mix, are the that utilization, margin have will levers coming whether some and board, whether all now be When skills. whether together, and value XX% for it’s deployed there roll back. of relate are some overall mix On of we it’s to pyramid which the demand to a we Plus, and that the higher of confidence margin, usage, have subcontractor deploy that the we XX%. the set to guidance the whether more we across it’s which continuing a

that you our exciting the joining employees mind a keeping and in for very direction to and to We and forward continue thank drive business will shareholders. in again clients, look year, We successful us.

Sandeep Mahindroo

Thank a day. you to connecting again. Look Have with forward you. good

Operator

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

Infosys Limited (INFY) 14 Jul 212022 Q1 Earnings call transcript