Demand Environment
  • Clients continuing to prioritize cost takeout over discretionary initiatives
    • But spending towards new growth areas like AI, cloud adoption, cybersecurity, data and analytics is observed
  • Clients have started to view IT investments more favorably post-election-related certainty and interest rate cuts in recent months
GenAI
  • Have built 4 small language models for banking, IT operations, cyber, and enterprises broadly
    • Have 2.5bn parameters, built using proprietary data sets
  • Developing over 100 new GenAI agents for deployment
    • Have live deployments, not just proof of concept
    • Typical business outcomes includes:
      • Time reduction
      • Cost reduction
      • Greater impact with customer base and growth
  • Working closely with GenAI partner ecosystem to develop joint solutions
  • Case studies:
    • Client: Large Technology Company
      • Project: Developed a Generative AI-powered research agent that generated comprehensive solutions within seconds for requests made for the product support teams
    • Client: Professional Services Company
      • Project: Created 3 audit agents to intelligently automate multiple tasks
  • Using GenAI for internal productivity
    • Small and large language models helping with software development
Revenue
  • CY24Q4 Revenue of $4,939mn, +6.1% YoY in CC
  • Regions (in order of growth):
    • India +40.1% YoY in CC
    • Europe +12.2% YoY in CC
    • North America +4.8% YoY in CC
      • Returned to positive growth trajectory after four quarters
    • ROW     -11.1% YoY in CC
  • Verticals (in order of growth):
    •   Manufacturing +10.7% YoY in CC
      • Automotive sector in Europe continues to remain slow
      • However, there is a continued momentum in areas such as engineering, IoT, supply chain, cloud ERP and digital transformation
      • The benefits of vendor consolidation are being more apparent, contributing to the growth of existing accounts and the establishment of new relationships
      • The pipeline is healthy, with a mix of large and small deals and a focus on cost takeout and portfolio rationalization
    •   Energy, Utilities, Resources and Services +8.6% YoY in CC
      • Macro headwinds and supply-demand imbalances continue to influence spending patterns
      • Growth in demand for electricity to cater to data centers is expected to bring in more investment in energy
      • Resources clients are more watchful about the changing geopolitical dynamics impacting the supply chain
      • Discretionary spend remains muted
      • Investment in industry clouds and energy transition solutions have helped win multiple deals
    •   Hi Tech +8.4% YoY in CC
      • Continues to remain soft
      • Some clients are reducing the run cost and pausing discretionary investments
      • Seeing opportunities in cost takeout deals, including legacy product management and managed services based business operations
      • Programs are driven by cloud computing and new tech like AI and ML
    •   Life Sciences +6.3% YoY in CC
    •   Financial Services +6.1% YoY in CC
      • Saw third consecutive quarter of volume growth
      • U.S. continues to grow strongly in this quarter and over the past few quarters
        • See discretionary spend increase in capital markets, mortgages, cards and payments
      • Have seen a revival in European Financial Services during Q3
      • Expansion into Nordics, Middle East, and Southeast Asia is also contributing to growth
    •   Communication +4.0% YoY in CC
      • Continues to face volatile macro environment, leading to growth challenges and rising OPEX pressure
      • Discretionary spending continues to be soft and current year growth is driven mainly by recent large deal wins focused on efficiency and consolidation
  •   Others +3.2% YoY in CC
  •   Retail +0.1% YoY in CC
    • Seeing an improvement in US with discretionary pressures easing
    • Companies are looking at investing in brand and technology initiatives
    • S/4HANA migration deadline is driving budget allocation to make enterprise workload compliant
    • Leveraging Infosys Topaz to showcase enhanced business value in predictive analytics and real-time insights and strategic decision-making
Bookings
  • CY24Q4 TCV of 17 large deal wins was $2.5bn
    • 63% was net new
    • Vertical-wise, signed 5 deals in Financial Services, 4 in Communication, 3 in Manufacturing, 2 each in Retail and EURS and one in Hi-Tech
    • Region-wise, signed 11 large deals in America and 6 in Europe, also includes a BOT deal to set up a GCC in India
  • Large deal pipeline has become stronger in CY24Q4
  • Seeing a 3.6% 9-month pricing realization tailwind
    • Seeing pricing as stable at this point in time
  • Decrease in share of to 5 clients is due to furloughs
Margin
  • CY24Q4 Operating margin of 21.3%, +80 bps YoY
    • Headwinds
      • 70 bps from furloughs and lower working days, offset by higher leave utilization and others
      • FY'24 comp increase, higher variable payout, impact due to amortization of intangibles from recent acquisitions and large deal ramp-up
    • Tailwinds
      • 40 bps from currency movements
      • 30 bps from Project Maximus​
      • 20 bps from lower costs relating to provisions for post-sales customer support and expected credit loss provision, offset by higher third-party costs
  • Wage hikes will happen in two phases
    • 1st phase starting January 1st
    • 2nd phase starting April 1st
    • Indian wages will increase 6% to 8% on average, with high performers getting more
    • Overseas increases will be low single digit
Employees
  • CY24Q4 Total employees of 323,379, +5,591 QoQ, +716 YoY
    • Second consecutive quarter of headcount addition
  • CY24Q4 Voluntary Attrition % (LTM - IT Services) of 13.7%, +80 bps YoY
  •  CY24Q4 Utilization (excluding trainees) of 86%, +170 bps YoY
    • 83% to 85% is the target range
  • Targeting 15,000 freshers for the year, with 20,000 expected for next year
Guidance
  • FY25 Revenue growth revised to 4.5% to 5.0% in CC
    • CY25Q1 has lower working days
  • FY25 Operating margin unchanged at 20% to 22%