Infosys Reported moderate PAT… Today Infy shares down by 4 %

Infosys to hire more freshers in FY22; to address high attrition through compensation, promotions.

IT services major Infosys on Wednesday reported a net profit of Rs 5,076 crore for the March quarter, as against the  poll estimates of Rs 5,130 crore. The company said that it expects FY22 revenue to grow 12-14 percent in constant currency. After the results, brokerages remained bullish on the stock. JPMorgan is ‘overweight’ on the stock while CS has an ‘outperform’ rating. Here’s what brokerages have to say:

Credit Suisse:

The brokerage continues to have an ‘outperform’ call on the stock but has cut its target to Rs 1,725 per share from Rs 1,810 earlier. It said that Q4 was an unimpressive quarter and believes FY22 guidance appears conservative.

Goldman Sachs:

The brokerage maintains a ‘buy’ call on the stock with a target at Rs 1,699 per share. Any correction would present an even better buying opportunity, added the brokerage.

Despite Infosys saw revenue growth and new deals, the slowdown in the quarter spiked attrition sharply to 15.2 percent from 10 percent in the previous quarter.  The company management said the attrition numbers reflect a strong demand environment,  indicating a crunch of talents.

The Bengaluru-based IT giant saw a slightly subdued Q4 compared to the stellar numbers reported by larger peer Tata Consultancy Services.

Infosys COO U B Pravin Rao said that the company will sustain attrition at these levels for the next few quarters.
“We historically have attrition of 13-15%, the current attrition is at the higher end. We are doing many interventions for employees, including compensations, promotions, etc. We are very confident of sustaining attrition at these levels,” Rao said.

Infosys also has robust hiring plans, looking to add more freshers in FY22 than the previous fiscal.
“We added 21,000 freshers from campuses in FY21, and plan to add over 25,000 freshers in FY22,” Rao said.
Of the 21,000 freshers hired in FY21, over 19,000 were from India, and for FY22, the plan is to hire over 24,000 from campuses in India, Rao mentioned.

CFO Nilanjan Roy said the pay hikes and headwinds of normalcy returning have been factored into the margin guidance band of 22-24 percent for FY22.

TCS on Monday announced its highest quarterly net addition of employees and the lowest attrition in any year.
The company was able to keep attrition at all-time low levels at 7.2 percent and also made a record quarterly net addition of 19,388 employees in the March quarter.

With the record employee net addition in the quarter, the total headcount stood at 488,649, a net addition of 40,185 during the year.

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