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Infosys net income in the second quarter increased by 11.7% thanks to large contracts won

Infosys had another quarter of exceptional results, with the IT major posting an 11.7% increase in second quarter net profit to 5,428 crore from the same period last year, beating Street estimates.

The company also raised its growth forecast for fiscal year 22 to 16.5-17.5 percent, thanks to large contracts and increased customer spending.

Daimler Accord

The company benefited from a higher contribution from the Daimler agreement, increased adoption of digital transformation by customers.

Company CEO and Managing Director Salil Parekh told a earnings press conference on Wednesday that Infosys will soon announce a new organizational structure with current COO UB Pravin Rao taking over his retirement in December of this year.

The main cause for concern, however, was an increase in the attrition rate to 20.1 percent from 13.9 percent. The company has already granted substantial increases in January and July, while promotions were given to top performing employees. “To fully exploit the potential of the market opportunity, we are expanding our graduate hiring program to 45,000 for the year, up from 35,000 for the current year,” said Pravin Rao. When it comes to lateral hires, people with digital skills are preferred, and around 80% of the additional demand from digital comes from the re-qualification of existing employees.

Nearly one million graduates join the IT industry each year. The company had to incur more costs to retain talent, with personnel costs increasing 3.4% sequentially and 17.5% year-on-year.

Parekh said the pipeline for large deals is very strong. The company won 22 contracts worth $ 2.15 billion in the July-September period, up from $ 2.6 billion in the previous quarter.

Income increases

Infosys revenue for the quarter increased 20.5% to 29,602 crore year-over-year. Constant currency revenues increased 19.4% year-on-year and 6.3% quarter-on-quarter. Digital revenues increased to 56.1% of total revenues, while the operating margin was 23.6%, showing a decrease of 1.8% due to headwinds on the supply side.

IT portal

Parekh said there has been steady progress on the computer system. More than 1.9 crore of returns were filed yesterday using the new system.

More than 18 crores of connections were observed on the portal. Over 3.8 unique users have successfully completed various transactions. Since the previous assessment year 96% of returns have been processed and since the current year 1 crore has been processed. To ensure smooth filing, Infosys has continuously engaged over 12,000 taxpayers and CAs. About 2-3 lakh computer returns are filed each day.

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