IT bellwether Infosys December quarter earnings on Friday was marked by Street-beating bottom lines, large deal wins and a higher revenue guidance.The companys operating margins improved during the quarter driven by relentless cost optimisation and operating leverage, said Nilanjan Roy, CFO at Infosys.Cash generation was extremely strong with cumulative free cash flow crossing $1.5 billion.
Return on equity increased to 25.9 per cent driven by margin expansion and increased shareholder payouts, he said.Key takeaways from the Q3 show:Revenue guidance increasedInfosys increased FY20 revenue guidance to 10-10.5 per cent in constant currency terms.
Earlier in September quarter earnings, the company had increased the lower end of FY20 revenue guidance to 9-10 per cent in constant currency terms.
Meanwhile, the IT major maintained operating margin guidance range for the financial year in the 21-23 per cent range.
Profit surges, beats estimatesThe companys Q3 profit grew 23.49 per cent year-on-year to Rs 4,457 crore from Rs 3,609 crore posted for the same quarter last year, which beat Street expectations.
Analysts in an ET NOW poll had estimated the number at Rs 4,204.50 crore.
Digital revenue surgesDigital revenues for the October-December quarter grew 40.8 per cent year-on-year and 6.8 per cent sequentially in constant currency terms to $1,318 million.
Digital revenue now constitutes 40.6 per cent of total revenues, a significant jump from 31.5 per cent reported for the same quarter last year.
On the other hand, revenue from the core sector slipped 5.8 per cent YoY to $1,925 million.Large wins at $1.8 billionInfosys said its large deal wins were at $1.8 billion.
However, this was far behind $2.8 billion deal wins reported for the September quarter.
The overall performance during the quarter was satisfactory on multiple counts broadbased growth, steady increase in client metrics and healthy large deal wins, said Pravin Rao, COO.
Large deal wins continue to be robust with 56 per cent growth so far this year.20 new client additionsInfosys added 20 new clients during the quarter.
It now has 1,384 active clients.
During the October-December period, it added one $100 million-plus client, four $10 million-plus and 12 $1 million-plus clients.
Major names onboarded included Telenet, Siemens Gamesa Renewable Energy, Volvo Cars and Services Australia.Dependency on North America growsInfosys revenue dependency on North America grew further in December quarter.
It earned 61.3 per cent from the region, up from 60.4 per cent in the same quarter last year.
This comes at the expense of revenue share from rest of the world (excludes North America, Europe and India) which slipped to 1.5 per cent from 12.8 per cent.No merit in whistleblower chargeThe audit panel of Infosys said that the allegations made against the company by whistleblower are substantially without merit.The audit committee concluded that no restatement of previously announced financial statements or other published financial information is warranted.
The findings came after Infosys audit committee of the board of directors concluded the independent investigation into allegations contained in the anonymous whistleblower complaints the company disclosed on October 21 last year.