Infosys Q2: Full-year revenue guidance raised; margin reverses June drop

Infosys' revenue in US Dollar terms increased 2.5 percent quarter-on-quarter to $4,555 million. A CNBC-TV18 poll had projected the figure to be $4,582.5 million. In rupee terms, the company's topline increased 6 percent to Rs 36,538 crore, lower than the consensus estimate of Rs 36,606 crore.

In constant currency terms, the company reported 4 percent growth compared to the June quarter.

Net profit for the company increased 12.3 percent to Rs 6,021 crore. The CNBC-TV18 poll expected the bottomline to come in at Rs 5,638 crore.

On the operational front, EBIT beat estimates of Rs 7,520 crore by increasing 13.9 percent compared to the June quarter to Rs 7,873 crore.

Infosys' EBIT margin reversed the 140 basis point drop it witnessed in the June quarter, by expanding 150 basis points to 21.5 percent. The poll expected EBIT margin at 20.54 percent. CFO Nilanjan Roy said that the company is very comfortable with the 21-22 percent margin guidance for the year.

The company also approved a share buyback worth Rs 9,300 crore. It will buyback shares from investors through the open market route at Rs 1,850 per share, which is a premium of 30 percent to Thursday's closing price.

Nuvama Alternative & Quantitative Research had pegged the quantum of the share buyback to be Rs 11,000 crore.

Infosys won large deals worth $2.7 billion during the quarter, the highest in the last seven quarters. The company had won deals worth $1.7 billion in the June quarter. CEO Parekh mentioned that while the pipeline for large deals is strong, they are witnessing concerns within the hi-tech and telecom division when it comes to the deal pipeline. The Hi-tech business contributed to 8.2 percent of the company's overall revenue for the September quarter.

In geographic terms, more than 60 percent of the company's topline came from North America while a quarter came from Europe. Parekh said that the growth in both the US as well as Europe was strong during the quarter but the company is remaining watchful amidst the developing external environment.

"At this point the demand looks decent but the question is where are we going to be couple of quarters from now?" Moshe Katri of Wedbush Securities told CNBC-TV18 over phone.

The management of Infosys also spoke about moonlighting where they said that they have let go of some employees over the last 12 months over the issue. However, the company did not provide a specific number. CEO Parekh said that they support employees for gig opportunities in the external environment with proper approval from their managers but do not support dual employment.