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ICICI Securities Report
Infosys Ltd.'s management commentary on medium-term growth outlook sounded more cautious (versus in previous quarters).
Large deal signings ($2.1 billion) were a tad lower than street expectations.
Both revenue growth (12%-14% YoY, constant currency) and Ebit margin guidance (22%-24%) for FY22 were in line with consensus.
However, understanding the forex assumptions baked into margin guidance is the key -- could it be 21%-23% without the recent rupee depreciation?
Retention costs (absent over trailing twelve months) may become a key overhang on profitability as attrition jumped 520 basis points QoQ to 15.2%.
Both the quantum (Rs 92 billion) and mode of buyback were disappointing given the tax/signalling inefficiency associated with open market buybacks.
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