Infosys

“At the lower end of the guidance, we have baked in higher uncertainty at the upper end of the guidance, we have baked in an improvement in the environment.”

“And Ankur, just to add to your second question, at the lower end of the guidance, we have assumed similarto slightly deterioration on the pricing. At the upper end, we have assumed improvement.”

“Our assumptions regarding acquisitions, the large deal European manufacturing client and the shift towards offshore delivery remains broadly unchanged.”

“One of these mega deals was for over $2 bn with a large international company for a period of seven years and it is net new.”

“So, in this year, there is going to be a very minuscule amount of benefit that you will get from that deal.”

“We won 19 large deals in Q2 with a TCV of $5.2 bn, which is second highest quarterly TCV in the last five years. Of this, 62% was net new.”

“We also renewed a $1 bn mega deal with an existing financial services client.”

“This takes H1's total large deal wins to $8.8 bn, which is a YoY growth of 28% with 62% net new.”

“FS and EURS are expected to grow higher than the company average.”

“And even with some volatility, you are going to continue to see a very good pace of growth over the next several quarters.”

“Sequential growth in Retail segment was primarily impacted by lower third-party revenues.”

“Hi-Tech segment was impacted by lower third-party revenues as well as reduced spend in a few large clients due to cost pressures emanating from budget cuts.”

“And then we have Hi-Tech, which essentially, I would say, for the most part is focused on one client in the US.”

“So one thing I would add, sorry, is that at the end, it is a finite period. It is not an ongoing thing, that is the main, I would say, the element there because that is finite, whereas the AI growth is secular, at least in our minds right now looking quite open.”

“We do not have at least to share externally like a number of, you know, where are we in which year and when it will happen, but we feel pretty positive as we look out into the next financial year.”

“Client spending remains cautious, reflecting geopolitical tensions, inflationary pressures and shifting technology priorities.”

“So there, what we see is over the past time horizon, there are instances where some companies or clients take a view to in-source pre-AI and with AI. We do not see a difference because of AI.”

“So, the budgets of our clients will go up, but at the end, it is not like it will go up in one place. It is not that overall will go up disproportionate, overall, will go up as a normal sort of a rate, but not disproportionately because also they need to manage their own budgets in a careful way.”

“H2 margins will be impacted by compensation hikes, softer revenue seasonality, continued sharing of AI driven productivity benefits and ramp-up of large deals. These headwinds will be partly offset by initiatives under Project Maximus.”

“But at this point in time, for the year, we are very confident of the guidance that we have given.”

“Q2 operating margins were at 21%, decline of 0.1% sequentially.”

“We had 70 bps of impact on post-sale customer support, which is a delta between two quarters.”

“That was offset by tailwinds of currency, 40 bps coming from the currency, 20 bps coming from a higher calendar and working days and 20 bps from the Project Maximus.”

“Free cash flow generation was strong at $928 mn at 113% of net profit.”

“We ended the quarter with cash and cash equivalents at $4.7 bn and a debt-free balance sheet.”

“DSO for the quarter was 64, down by seven days compared to DSO last year.”

“Q2 yield on cash investment balance was at approximately 6.9%.”

“We did a small acquisition, you may know, in the cyber in Australia a few quarters ago, which is also building out very strongly”

“There have been companies that, as you mentioned, are looking to do something different with their GCCs, and we are also in discussions with some of those where we can either help them or either we can take them and transform them.”

“The Board has announced an interim dividend of `26, an increase of 13% compared to last year.”

“we had very clearly said that 85% of the free cash flow that we generate, we will return back to shareholders over a five-year period.”

“Last year's final dividend (Editor’s comment) was INR25, and therefore, we have increased that from that to INR26 now.”

“It will be a combination of dividend and buyback. And within that, it will be a progressively increasing dividend.”

“Additionally, normalization of 40 bps impact from EURS program terminated in Q1 was offset by lower realization due to high competitive intensity.”

“Growth was below our expectations, volumes were softer and price increases were lower than anticipated amidst high competitive intensity.”

“If you look at what we are seeing today is a pricing pressure on the back of competitive intensity, which has increased in the last couple of quarters.”

“We had called out that both of them put together would roughly mean 1.8% to 2% for the year.”

“So Sandeep, yes, the large portion of the impact will come in Q4, which is what we had clarified.”

“There will be furloughs that will impact the H2, there will be lower working days and all of those implications and all of those impacts.”

“Our AI revenue was standout at 10.5% of our total revenue, growing 29% sequentially.”

“So the revenue of 10.5% AI, we are sharing is new revenue.”

“Q2 revenues were $5,145 mn, an increase of 1.2% sequentially and 1.5% on YoY in constant currency terms.”

“Acquisition contributed approximately 0.4% to sequential growth.”

“Attrition reduced to 12.7% versus 13% sequentially.”