Result Analysis of Infosys Ltd For Q3-FY24

Earnings Snapshot

Methodology: Red= Decreased, Green= Increased, Yellow= Mediocre Increase, N/A= Inc/Dec is over 100%. For calculation of Operating Profit, the Depreciation Expense and Finance Cost are removed)

Analysis

Revenue from Operations   

1. Q-o-Q: Infosys witnessed a marginal decrease of 0.44% in revenue from operations, totaling ₹38,821 crores in Q3 FY24. While the dip is small, it suggests some stabilization or a mild contraction compared to the previous quarter.
2. Y-o-Y: On a year-on-year basis, there was a modest 1.3% growth in revenue from operations compared to Q3 FY23, indicating a steady but measured expansion over the last year.

Operating Profit

1. Q-o-Q: Infosys reported a 3.76% decline in operating profit, reaching ₹7,830 crores in Q3 FY24. This decline may be attributed to various factors affecting operational efficiency in the current quarter compared to the previous one.
2. Y-o-Y: The year-on-year operating profit witnessed a 4.1% increase, demonstrating overall improvement in profitability compared to the same quarter last year.

Operating Profit Margin

1. The operating profit margin experienced a quarter-on-quarter reduction of 3.33%, settling at 20% in Q3 FY24. This decline may indicate increased operational costs or a decrease in efficiency compared to the previous quarter.
2. On a year-on-year basis, the operating profit margin decreased by 5.3%, standing at 20% in Q3 FY24. This suggests a challenge in maintaining the same level of profitability as the previous year.

Net Profit

1. Q-o-Q: Infosys reported a 1.64% decrease in net profit, totaling ₹6,113 crores in Q3 FY24. Despite the decline, the company continues to generate substantial profits in the current quarter.
2. Y-o-Y: On a year-on-year basis, there was a 7.2% decrease in net profit compared to Q3 FY23, indicating a challenge in sustaining the same level of profitability as the previous year.

Net Profit Margin

1. The net profit margin witnessed a quarter-on-quarter decrease of 1.20%, settling at 16% in Q3 FY24. This reduction may be attributed to various factors affecting the company's bottom line.
2. On a year-on-year basis, the net profit margin decreased by 8.4%, standing at 16% in Q3 FY24. This suggests challenges in maintaining profitability compared to the same quarter last year.

Earnings Per Share (EPS)

1. The basic and diluted EPS both experienced a 1.67% decline quarter-on-quarter, reaching ₹14.76 in Q3 FY24. Despite this dip, the company continues to generate earnings for its shareholders.
2. On a year-on-year basis, both basic and diluted EPS decreased by 6.1%, demonstrating a challenge in sustaining the same level of earnings as the previous year.

Overall Interpretation

Infosys faced some challenges in Q3 FY24, with a slight decline in revenue, operating profit, and net profit. The quarter-on-quarter and year-on-year comparisons highlight areas where the company needs to focus on maintaining or improving operational efficiency. The decline in profitability margins indicates potential cost challenges. Despite these challenges, Infosys remains a significant player in the IT sector, and its ability to adapt to market dynamics will be crucial for future performance.