Infosys INFY Stock News

After announcing impressive growth through the beginning of fiscal 2020, Infosys Ltd ADR (NYSE: INFY) is seeing gains in the market this morning. The stock is trading up more than 7% early on. Here’s what’s happening:

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INFY Stock Gains On Strong Start To Fiscal 2020

In a press release issued early this morning, Infosys announced that it had an incredible start to the fiscal 2020 year. Here’s what we saw from the report:

  • Revenue – Revenue for Q1 came in at $3.131 billion, suggesting 10.6% year over year growth and 2.3% quarter over quarter growth. Digital revenues in the quarter represented 35.7% of total revenue at $1.119 billion. This high margin sector had year over year growth of 41.9% and quarter over quarter growth of 8.6%.
  • Profit – INFY said that operating profits came in at $642 million. That represents a decline of 4.2% year over year and 2.3% quarter over quarter.
  • Guidance – Finally, the company increased revenue growth guidance to the range between 9.5% and 10% for the 2020 fiscal year. Operating margin guidance for the year is maintained at a range between 21% and 23%.

Operational Highlights

INFY was the center of several client wins in the quarter. In fact, the company was selected by Finnish postal service Posti as a strategic partner for the digital transformation of its business.

The company also entered into a long term partnership with Toyotal Material Handling Europe. Under this partnership, the company will assist in the digital transformation journey of the company.

The US subsidiary of Infosys BPM, Infosys McCamish, entered into a partnership with Pan-American Life Insurance Group. Under the partnership, the company will provide policy administration services for PALIG’s new Global Asset Indexed Universal Life product.

The company was awarded with several other projects, a list of which is available by clicking the link above, titled “press release issued early this morning.”

Management Commentary

In a statement, Pravin Rao, COO at INFY, had the following to offer:

We had a good quarter as we continue to leverage our digital navigation framework to help our clients build and nurture their live enterprise. 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.

The above statement was followed up by Nilanjan Roy, CFRO at INFY. Here’s what he had to offer:

Our first quarter results and continued focus on operational efficiencies gives us the confidence on our revenue and margin guidance for the year. 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.

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