BENGALURU, India, July 12, 2019 /PRNewswire/ -- "We had a strong start to FY 20 with constant currency growth accelerating to 12.4% on year over year basis and digital revenue growth of 41.9%. This was achieved through our consistent client focus and investments which have strengthened our client relationships," said Salil Parekh, CEO and MD. "Consequently, we are raising our revenue guidance for the year from 7.5%-9.5% to 8.5%-10%."
41.9% YoY 12.4% YoY 2.8% QoQ 20.50% $2.7 bn Digital CC growth CC growth CC growth Operating margin Large deal signings
-- Q1 20 revenues grew year-on-year by 10.6% in USD; 12.4% in constant currency -- Q1 20 revenues grew sequentially by 2.3% in USD; 2.8% in constant currency -- Q1 20 Digital revenues at $1,119 million (35.7% of total revenues), year-on-year growth of 41.9% and sequential growth of 8.6% in constant currency -- Increased FY 20 revenue growth guidance range to 8.5%-10% in constant currency -- Maintained FY 20 operating margin guidance range of 21%-23%
1. Financial Highlights - Consolidated results under International Financial Reporting Standards (IFRS)
Revenues were $3,131 million, growth of 10.6% YoY and 2.3% QoQ
Operating profit was $642 million, decline of 4.2% YoY and 2.3% QoQ. Operating margin was 20.5%.
"We had a good quarter as we continue to leverage our digital navigation framework to help our clients build and nurture their live enterprise," said Pravin Rao, COO. "Large deal TCV was highest ever at $2.7 bn. Segment growth was robust with all large regions and most verticals growing at double digits yoy in constant currency."
"Our first quarter results and continued focus on operational efficiencies gives us the confidence on our revenue and margin guidance for the year," said Nilanjan Roy, CFO. "Continuing our objective of improving shareholder returns, we have revised our capital allocation policy upwards to distribute ~ 85% of free cash flows cumulatively over a 5-year period."
2. Capital Allocation
-- The Company is on track towards completing its previously announced share buyback of INR 8,260 crore. The company has till date bought back shares worth `INR 5,934 crore. -- The Company's current policy is to pay up to 70% of the free cash flow annually by way of dividend and/or buyback. The Board has reviewed and approved a revised Capital Allocation Policy of the Company after taking into consideration the strategic and operational cash requirements."Effective from Financial year 2020, the company expects to return approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi-annual dividends and/or share buyback and/or special dividends, subject to applicable laws and requisite approvals, if any."Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS Dividend and buyback include applicable taxes
3. Client wins & Testimonials
-- We were selected by Finnish postal service Posti as a strategic partner for the digital transformation of its business and IT services to drive the modernization of its IT applications and infrastructure, helping it move to a flexible IT service model. This will also strengthen Posti's ability to respond to changes in customer needs with agility and provide a seamless customer user experience through a dedicated command center. -- We entered into long term strategic partnership with Toyota Material Handling Europe to help in its digital transformation journey by facilitating transformation to a scalable digital hybrid cloud platform, providing application services, digital workplace, infrastructure management and a dedicated data center operation. -- Infosys McCamish, a US based subsidiary of Infosys BPM entered into a partnership with Pan-American Life Insurance Group (PALIG), a leading provider of life, accident and health insurance to provide policy administration services for PALIG's new Global Assets Indexed Universal Life product. -- We have partnered with a leading consumer technology company to help them localize their virtual assistant by training their AI. Infosys is helping the client to define its overall global strategy for localization while analyzing data to identify patterns which can train the AI to respond better to the user command. This will improve their virtual assistant to provide a better user experience. -- Marc Schmidt, Head of SDD and GIT-ACI, BSH said, "At BSH GmbH, for the software Development Platform (SDD) which is used for developing thousands of micro to large scale applications, we wanted to deploy an auto-scaling Infrastructure on AWS Cloud that can handle millions of users across the world. Infosys leveraging its Agile and DevOps methodology and expertise, automated build and deployment which led to an overall 70% reduction in environment provisioning time, Zero downtime, 100% improvement in recovery time objectives." -- One of the world leaders in the manufacturing of connectivity and sensor products engaged Infosys to transform their delivery of Sales solutions needed for their globally dispersed sales team, leveraging Salesforce ecosystem. Infosys over the last 12 months has moved to a Highly Agile Capability based delivery model and helped in an estimated 40% improvement in time to market for solutions, shortened release cycles from once-a-quarter to on-demand releases and improvement in time to revenue of solutions by upto 25%