Infosys raises FY20 revenue growth outlook post strong topline performance in Q2

Information technology firm Infosys Limited (NYSE: INFY) said its revenues for the second quarter of 2020 jumped 10% to $3.2 billion, which was higher than the average analysts’ expectation of $3.19 billion. INFY shares were modestly up during pre-market trading hours on Friday.

The top-line was boosted by Digital revenues of $1.23 million, which was 34% higher than a year ago.

Down the line, the Bengaluru-based firm reported flat profits of 13 cents per share, which was a cent lower than what the markets had expected.

“We saw expansion in operating margins during the quarter driven by improvement in operational parameters and cost efficiencies,” CFO Nilanjan Roy said in a statement.

“We took the first step towards implementation of our new capital allocation policy by increasing interim dividend by over 14% compared to FY19,” he added.

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Q2 operating margin came in at 21.7%, 1.2% improvement over the last sequential quarter.

Meanwhile, the company raised the lower end of its FY20 revenue guidance. Infosys currently expects revenue growth for the fiscal year in the range of 9%-10% in constant currency, compared to the earlier projection of 8.5% to 10%.

Guidance on operating margin was maintained in the range of 21-23%.

INFY stock has gained 18% in the year-to-date period. 

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