Infosys: Double Digit Growth for the Fourth Consecutive Quarter, Coupled With 1.2% Operating Margin Expansion in Q2

Bengaluru, India (ots/PRNewswire) - "Our performance was robust on
multiple dimensions - revenue growth, digital growth, operating
margins, operational efficiencies, large deal signings and reduction
in attrition," said Salil Parekh, CEO and MD. "All these are clear
signs that we are progressing well in our journey of
client-centricity and maximizing value for our stakeholders."

38.4% 11.4% 3.3% 1.2% QoQ $2.8 bn
YoY YoY QoQ
Digital CC CC OM Large
CC growth growth expansion deal
growth to 21.7% signings

- Q2 20 revenues grew year-on-year by 9.9% in USD; 11.4% in constant
currency
- Q2 20 revenues grew sequentially by 2.5% in USD; 3.3% in constant
currency
- Q2 20 Digital revenues at $1,230 million (38.3% of total revenues),
year-on-year growth of 38.4% and sequential growth of 10.7% in
constant currency
- Q2 20 operating margin at 21.7%, 1.2% improvement over Q1 20
- H1 revenues grew by 11.9% in constant currency
- H1 operating margin at 21.1%, within the margin guidance for the
year
- Declared interim dividend of INR8 per share (approximately $0.11
per ADS*)
- Increased lower end of FY 20 revenue guidance; revised guidance is
9%-10% in constant currency
- Maintained FY 20 operating margin guidance range of 21%-23%

*USD/INR exchange rate as of September 30, 2019

1. Financial Highlights - Consolidated results under International
Financial Reporting Standards (IFRS)

For the For six
quarter months
ended ended
September September
30, 2019 30, 2019
Revenues Revenues
were were
$3,210 $6,340
million, million,
growth of growth of
9.9% YoY 10.2% YoY
and 2.5% Operating
QoQ profit
Operating was
profit $1,338
was $696 million,
million, decline
increase of 1.8%
of 0.5% YoY.
YoY and Operating
8.3% QoQ. margin
Operating was
margin 21.1%.
was Basic EPS
21.7%. was
Basic EPS $0.26,
was growth of
$0.13, 1.6% YoY
growth of
0.2% YoY
and 5.6%
QoQ

"Q2 witnessed another quarter of all-round growth in industry
segments and geographies which is a testimony to our strong
credentials and client relevance", said Pravin Rao, COO. "Large deal
wins were $2.8 bn. We are especially pleased by the reduction in
attrition driven by our focus on enhanced employee value
proposition."

"We saw expansion in operating margins during the quarter driven
by improvement in operational parameters and cost efficiencies", said
Nilanjan Roy, CFO. "We took the first step towards implementation of
our new capital allocation policy by increasing interim dividend by
over 14% compared to FY 19."

2. Capital Allocation

The Company completed its share buyback of INR8,260 crore on 26th
August, 2019. With this the company completed the additional capital
return program of upto INR13,000 crore announced in April 2018.

3. Client wins & Testimonials

- We were selected by Toyota Material Handling North America (TMHNA)
for a cloud-based IoT telematics product implementation along with
application support and development for its SAP Platform. As the
development partner for TMHNA Global Telematics Solution (GTS), an
industry leading cloud-based IoT offering, Infosys is enabling
remote monitoring and diagnostic capabilities including vehicle
access control, system maintenance, condition sensing and location
tracking.
- We were selected as a strategic partner by Movement Mortgage, a
fast-growing mortgage bank in the U.S., to lead its digital
transformation and accelerate growth. Infosys will support Movement
Mortgage's 650 locations in 47 states to ensure the smooth
transition of business models in key projects, with the aim to
increase business volume and leverage the company's fintech
services to develop mortgage industry specific solutions for
Infosys customers.
- In collaboration with Microsoft, we announced a long-term strategic
partnership with JG Summit Holdings, Inc., one of the largest and
most diversified conglomerates, headquartered in Manila,
Philippines. As a technology services partner, Infosys is helping
formulate and execute the digital transformation strategy for JG
Summit, based on Microsoft Azure, an open, hyper-scale,
enterprise-grade cloud platform, along with SAP S/4 HANA. The
collaboration will offer JG Summit seamless implementation and
migration to Microsoft Azure cloud platform, to develop an agile
and robust digital infrastructure for its business processes.
- EdgeVerve Systems, a subsidiary of Infosys, was selected by Al Ahli
Bank of Kuwait to steer its automation journey using AssistEdge
Robotic Process Automation (RPA). We are working the bank in their
process automation journey, driving cost efficiencies and
streamlining its operations.
- We have partnered with one of the largest utility companies to
transform its IT Service Management. The program, leveraging
ServiceNow, is helping our client significantly improve end-user
experience, enhance employee productivity and deliver business
agility. Infosys will also deliver a comprehensive solution for
organization change management and user training as a part of this
program.

4. Recognitions

- Ranked 3 in the Forbes list of The World's Best Regarded Companies
for 2019
- Won the United Nations Global Climate Action Award in the 'Climate
Neutral Now' category
- Recognized as a leader in Gartner Magic Quadrant for IT Services
for Communications Service Providers, Worldwide
- Recognized as a leader in Software Product Engineering Services
PEAK Matrix(TM) Assessment 2019 by Everest Group
- Recognized as a leader in the DevOps Services PEAK Matrix(TM)
Assessment 2019 by Everest Group
- Recognized as a leader in IDC MarketScape: Worldwide Intelligent
Automation Services 2019 Vendor Assessment
- Recognized in HFS Top 10: Digital Front Office: CX Design, Sales,
And Marketing
- Recognized in HFS Top 10: Banking and Financial Services (BFS)
Sector Service Providers
- Recognized in HFS Top 10: Cloud Migration and Management Services
2019
- Recognized as a Leader in NelsonHall's Smart IT Services in
Utilities
- Recognized in HFS SAP SuccessFactors Services Top 10 Report
- Recognized as 2019 Working Mother & AVTAR Best 100 Companies for
Women in India and '2019 Champion of Inclusion' in the Most
Inclusive Companies in India Index
- Won the 2019 Oracle Excellence Award for Global Partner of the Year
in CX - Sales Cloud
- Won the Oracle Excellence Award for NA partner of the Year for
Emerging Technologies
- Recognized as the 2019 Global Alliance SI Partner of the Year by
Microsoft
- Recognized as the Microsoft US Service Partner ACR Winner for the
FY20 Microsoft One Commercial Partner Winners Circle program

About Infosys

Infosys is a global leader in next-generation digital services and
consulting. We enable clients to navigate their digital
transformation, leveraging our teams from over 46 countries. With
over three decades of experience in managing the systems and workings
of global enterprises, we expertly steer our clients through their
digital journey. We do it by enabling the enterprise with an
AI-powered core that helps prioritize the execution of change. We
also empower the business with agile digital at scale to deliver
unprecedented levels of performance and customer delight. Our
always-on learning agenda drives their continuous improvement through
building and transferring digital skills, expertise, and ideas from
our innovation ecosystem.

Visit www.infosys.com to see how Infosys (NYSE: INFY) can help
your enterprise navigate your next.

Safe Harbor

Certain statements mentioned in this release concerning our future
growth prospects are forward-looking statements regarding our future
business expectations intended to qualify for the 'safe harbor' under
the Private Securities Litigation Reform Act of 1995, which involve a
number of risks and uncertainties that could cause actual results to
differ materially from those in such forward-looking statements. The
risks and uncertainties relating to these statements include, but are
not limited to, risks and uncertainties regarding fluctuations in
earnings, fluctuations in foreign exchange rates, our ability to
manage growth, intense competition in IT services including those
factors which may affect our cost advantage, wage increases in India,
our ability to attract and retain highly skilled professionals, time
and cost overruns on fixed-price, fixed-time frame contracts, client
concentration, restrictions on immigration, industry segment
concentration, our ability to manage our international operations,
reduced demand for technology in our key focus areas, disruptions in
telecommunication networks or system failures, our ability to
successfully complete and integrate potential acquisitions, liability
for damages on our service contracts, the success of the companies in
which Infosys has made strategic investments, withdrawal or
expiration of governmental fiscal incentives, political instability
and regional conflicts, legal restrictions on raising capital or
acquiring companies outside India, and unauthorized use of our
intellectual property and general economic conditions affecting our
industry. Additional risks that could affect our future operating
results are more fully described in our United States Securities and
Exchange Commission filings including our Annual Report on Form 20-F
for the fiscal year ended March 31, 2019. These filings are available
at www.sec.gov. Infosys may, from time to time, make additional
written and oral forward-looking statements, including statements
contained in the Company's filings with the Securities and Exchange
Commission and our reports to shareholders. The Company does not
undertake to update any forward-looking statements that may be made
from time to time by or on behalf of the Company unless it is
required by law.

Infosys Limited
and
subsidiaries
Audited
Condensed
Consolidated
Balance Sheet
as at
(Dollars in
millions except
equity share
data)
September March
30, 2019 31,
2019
ASSETS
Current assets
Cash and cash 2,324 2,829
equivalents
Current 496 958
investments
Trade 2,265 2,144
receivables
Unbilled 1,026 777
revenue
Prepayments and 761 827
other current
assets
Income tax 5 61
assets
Derivative 15 48
financial
instruments
Total current 6,892 7,644
assets
Non-current
assets
Property, plant 1,878 1,931
and equipment
Right-of-use 552 -
assets(B3)
Goodwill 576 512
Intangible 191 100
assets
Non-current 556 670
investments
Deferred income 192 199
tax assets
Income tax 904 914
assets
Other 280 282
non-current
assets
Total 5,129 4,608
non-current
assets
Total assets 12,021 12,252
LIABILITIES AND
EQUITY
Current
liabilities
Trade payables 301 239
Lease 73 -
liabilities(B3)
Derivative 5 2
financial
instruments
Current income 216 227
tax liabilities
Client deposits 2 4
Unearned 382 406
revenue
Employee 258 234
benefit
obligations
Provisions 86 83
Other current 1,388 1,498
liabilities
Total current 2,711 2,693
liabilities
Non-current
liabilities
Lease 503 -
liabilities(B3)
Deferred income 99 98
tax liabilities
Employee 6 6
benefit
obligations
Other 113 55
non-current
liabilities
Total 3,432 2,852
liabilities
Equity
Share capital- 332 339
INR5 ($0.16)
par value
4,800,000,000
(4,800,000,000)
equity shares
authorized,
issued and
outstanding
4,239,482,666
(4,335,954,462)
equity shares
fully paid up,
net of
18,929,512
(20,324,982)
treasury shares
as at September
30, 2019 (March
31, 2019)
Share premium 295 277
Retained 10,510 11,248
earnings
Cash flow hedge 2 3
reserve
Other reserves 460 384
Capital 17 10
redemption
reserve
Other (3,079) (2,870)
components of
equity
Total equity 8,537 9,391
attributable to
equity holders
of the company
Non-controlling 52 9
interests
Total equity 8,589 9,400
Total 12,021 12,252
liabilities and
equity

Infosys Limited
and subsidiaries
Audited
Condensed
Consolidated
Statement of
Comprehensive
Income for the
(Dollars in
millions except
equity share and
per equity share
data)
Three months Three months Six months Six months
ended ended ended ended
September 30, September 30, September 30, September 30,
2019 2018 2019 2018
Revenues 3,210 2,921 6,340 5,753
Cost of sales 2,140 1,884 4,261 3,703
Gross profit 1,070 1,037 2,079 2,050
Operating
expenses
Selling and 165 154 333 303
marketing
expenses
Administrative 209 191 408 384
expenses
Total operating 374 345 741 687
expenses
Operating profit 696 692 1,338 1,363
Other income, 89 105 195 212
net
Finance cost(B3) (6) - (12) -
Reduction in the - - - (39)
fair value of
Disposal Group
held for
sale(A1)
Profit before 779 797 1,521 1,536
income taxes
Income tax 207 216 403 420
expense
Net profit 572 581 1,118 1,116
Other
comprehensive
income
Items that will
not be
reclassified
subsequently to
profit or loss:
Re-measurements (3) 1 (6) 1
of the net
defined benefit
liability/asset,
net
Equity 1 2 1 2
instrument
through other
comprehensive
income, net
(2) 3 (5) 3
Items that will
be reclassified
subsequently to
profit or loss:
Fair valuation - (2) 2 (9)
of investments,
net
Fair value 2 (4) (1) (3)
changes on
derivatives
designated as
cash flow hedge,
net
Foreign currency (224) (461) (207) (929)
translation
(222) (467) (206) (941)
Total other (224) (464) (211) (938)
comprehensive
income/(loss),
net of tax
Total 348 117 907 178
comprehensive
income
Profit
attributable to:
Owners of the 569 581 1,115 1,116
Company
Non-controlling 3 - 3 -
interests
572 581 1,118 1,116
Total
comprehensive
income
attributable to:
Owners of the 346 117 905 178
Company
Non-controlling 2 - 2 -
interests
348 117 907 178
Earnings per
equity share
Basic ($) 0.13 0.13 0.26 0.26
Diluted ($) 0.13 0.13 0.26 0.26
Weighted average
equity shares
used in
computing
earnings per
equity share
Basic 4,249,343,678 4,347,055,177 4,275,615,916 4,346,857,296
Diluted 4,255,822,953 4,352,208,472 4,282,322,537 4,351,915,210

NOTES:

A. Notes pertaining to previous quarters / periods

1. In the six months ended September 30, 2018, the Company had
recorded a reduction in the fair value amounting to $39 million in
respect of its subsidiary Panaya.

B. Notes pertaining to the current quarter

1. The audited interim condensed consolidated Balance sheet and
Statement of Comprehensive Income for the three months and half year
ended September 30, 2019 have been taken on record at the Board
meeting held on October 11, 2019.

2. A Fact Sheet providing the operating metrics of the Company can
be downloaded from www.infosys.com.

3. On account of adoption of IFRS 16- Leases effective April 1,
2019.

IFRS-INR Press Release: https://www.infosys.com/investors/reports-
filings/quarterly-results/2019-2020/q2/Documents/IFRS-INR-press-relea
se.pdf

Fact Sheet: https://www.infosys.com/investors/reports-filings/quar
terly-results/2019-2020/q2/Documents/fact-sheet.pdf

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