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    INFY   INE009A01021

INFOSYS LIMITED

(INFY)
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India's Infosys falls over 5% on profit miss, attrition worries

04/15/2021 | 01:26am EDT
FILE PHOTO: The Infosys logo is seen at the SIBOS banking and financial conference in Toronto

NEW DELHI/BENGALURU (Reuters) - Infosys Ltd shares fell as much as 5.5% on Thursday, a day after the Indian software services firm reported quarterly net profit below analysts' estimates and on worries that a spike in voluntary attrition could squeeze margins.

The Bengaluru-headquartered company posted a 17.5% rise in net profit to 50.76 billion rupees ($675.4 million) in the three months to March 31. Analysts had estimated a profit of 51.93 billion rupees, according Refinitiv data.

The sharp increase in attrition is a cause of worry and could be a risk to the top end of margin guidance, Investec analysts said in a note.

On Wednesday, Infosys Chief Executive Officer Salil Parekh said in a call with reporters that the company was targeting margins of 22% to 24% for the full year 2021-22.

Infosys reported a voluntary attrition rate of 15.2% for its IT services segment during the March quarter, up from 10% in the preceding quarter.

"Considering the strong deal momentum, a continued increase (in attrition) would require higher lateral additions and potentially meatier salary increases to retain talent," Investec said.

In addition to employee costs, Infosys will also have transition costs from large deals and return of some expenses which were saved because of the COVID-19 pandemic, Investec analysts said.

On Wednesday, Infosys forecast annual revenue growth of 12% to 14% in constant currency terms for the year to end-March 2022, buoyed by client demand for its digital services during the pandemic.

Quarterly revenue rose to 263.11 billion rupees from 232.67 billion rupees a year earlier.

The company recommended a final dividend for the year of 15 rupees per share, and approved a share buyback of up to 92 billion rupees.

Bigger rival Tata Consultancy Services on Monday posted a 15% jump in profit on cloud services demand, while smaller counterpart Wipro will report results later on Thursday.

($1 = 75.2930 Indian rupees)

(Reporting by Sankalp Phartiyal in New Delhi; Additional reporting by Shivani Singh and Chris Thomas in Bengaluru; Editing by David Goodman, Jan Harvey and Subhranshu Sahu)

By Sankalp Phartiyal and Sethuraman N R


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
INFOSYS LIMITED 0.75% 1661.05 Delayed Quote.31.33%
TATA CONSULTANCY SERVICES LTD. 0.76% 3297.95 Delayed Quote.14.36%
WIPRO LIMITED -0.38% 596.85 End-of-day quote.54.52%
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Financials
Sales 2022 1 184 B 15 962 M 15 962 M
Net income 2022 221 B 2 984 M 2 984 M
Net cash 2022 306 B 4 130 M 4 130 M
P/E ratio 2022 31,3x
Yield 2022 1,94%
Capitalization 6 996 B 94 278 M 94 323 M
EV / Sales 2022 5,65x
EV / Sales 2023 4,96x
Nbr of Employees 267 953
Free-Float 84,9%
Chart INFOSYS LIMITED
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Infosys Limited Technical Analysis Chart | INFY | INE009A01021 | MarketScreener
Technical analysis trends INFOSYS LIMITED
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 37
Last Close Price 1 649,25 INR
Average target price 1 759,40 INR
Spread / Average Target 6,68%
EPS Revisions
Managers and Directors
Salil S. Parekh Chief Executive Officer, MD & Executive Director
Mohit Joshi Co-President
Ravi Kumar S. Co-President & Deputy Chief Operating Officer
Nilanjan Roy Chief Financial Officer
Nandan M. Nilekani Non-Executive Chairman
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