Infosys Limited (NSE:INFY) Q2 2020 Earnings Conference Call Transcript
Oct 11, 2019 • 08:00 am ET
Ladies and gentlemen, good day and welcome to the Infosys Earnings Conference Call. [Operator Instructions]
I now hand the conference over to Mr Sandeep Mahindroo. Thank you, and over to you, sir.
Thanks Karima. Hello, everyone and welcome to Infosys earnings call to discuss Q2 FY '20 earnings release. This is Sandeep from Investor Relations in Bangalore.
Joing us today on this call is CEO, Mr. Salil Parekh; COO, Mr. Pravin Rao; CFO, Mr. Nilanjan Roy, along with other members of the senior management team. We'll start this call with some remarks on the performance of the company for Q2 by Salil followed by comments from the Nilanjan and Pravin, subsequent to this we'll open up the call for questions.
Please note that anything which we say which refers to our outlook is considered as forward-looking statement which must be read in conjunction with the risks that the company faces. A full statement explanation of these risks is available in our filings with the SEC, which can be found on www.sec.gov.
I'd now like to pass it on to Salil.
Thank you, Sandeep. Good afternoon and good morning to those on the call, and thank you for joining us today. Infosys has delivered another strong quarter. I'm happy with our performance in the second quarter which was robust across multiple dimensions. One double-digit growth for the fourth consecutive quarter; two, continued strong growth in digital; three, expansion in operating margin; four, improvement in operational parameters, especially in utilization and onsite offshore mix; five, large deal signings; and six, reduction in attrition.
We grew 11.4% in Q2 year-on-year in constant currency or 3.3% quarter-on-quarter. Six of the seven business segments and both US and Europe grew double-digits constant currency year-on-year. Pravin will provide more color on different industry verticals in just a few minutes.
Digital revenues in Q2 were $1.23 billion, constituting 38.3% of overall revenues and witnessed over 38% growth year-on-year in constant currency. Operating margin in Q2 saw a healthy improvement of 21.7% compared to 20.5% in Q1. Operating margin improvement was despite compensation increases provided to employees and was driven by significant improvement in utilization, onsite mix, employee pyramid improvement and tight overall cost management. Nilanjan will elaborate on this during his remarks.
Large deal signing in Q2 was extremely strong at $2.8 billion, while a large part of this was renewals. These renewals solidify our position significantly in our existing client base. Large TCV is up by 75% in H1 '20 compared to H1 '19.
I'm also pleased with the reduction in attrition, which declined to 19.4%, a decline of 2 percentage points compared to Q1. Within this attrition voluntary attrition is lower at below 18%. With our clients continuing to leverage digital to drive growth there are three areas within digital transformation that I want to highlight with examples of our work with clients. These are experience, data analytics and cloud. A global confectionery Company we created Digital Asset Management platform that help them deliver a superior