Information technology giant Infosys on Wednesday forecast revenue growth of 13-15% in fiscal 2022-23 (FY23) on the back of a “robust demand environment” and a “robust deal pipeline”, despite its March quarter earnings growth. Key data (4QFY22) missed analysts’ expectations. Infosys reported weak results for the quarter but met full-year expectations. The company reported a fourth-quarter net profit of Rs 5,686 crore, up 12% year-on-year but 2.1% quarter-on-quarter.

In terms of revenue growth, Infosys is ahead of TCS, the country’s largest software services company. The company reported a 22.7% increase in revenue to Rs 32,276 crore in the fourth quarter, but only 1.3% quarter-on-quarter.
TCS’ revenue rose 15.8% year-on-year to Rs 50,591 crore in the March quarter. For the full year, Infosys’ revenue was Rs 1.22 trillion, while TCS was Rs 1.92 trillion. Analysts expect Infosys to post revenue of Rs 32,788 crore and a net profit of Rs 6,000 crore, according to a Bloomberg poll.

However, Salil Parekh, CEO and managing director of Infosys said the deal momentum and the guidance provided by the company set a solid foundation for FY23. “Infosys achieved its highest annual growth rate in a decade, with broad-based performance driven by deeply differentiated digital and Infosys Cobalt-led cloud capabilities, supported by a ‘One Infosys’ approach. As our customers appreciate our success in navigating digital journeys, we are confident in our ability to continue to gain market share,” he said.

The company recommended a final dividend of Rs 16 per share for FY22. Infosys’ margins also disappointed, with margins of 21.5% in the fourth quarter, down from 23.5% in the third quarter, due to supply-side constraints and higher subcontractor costs. For FY23, the company expects an operating margin of 21-23%. In this regard, TCS did better, with a margin of 25.3% in the fourth quarter.

Revenue growth guidance for FY23E reflects another strong year, implying a continued robust demand environment on the back of healthy deal wins. However, FY23 EBIT margin guidance has been lowered by 100 bps at both the upper and lower end of the FY22 guidance range, reflecting continued cost pressures due to a supply-demand mismatch,” a report from ICICI Research said. The company’s more significant concern remains employee turnover, which jumped from 25.5% in the third quarter of fiscal 2022 to 27.7% in the fourth quarter. The company added 85,000 fresh graduates in FY22 and planned to hire more than 50,000 in FY23