The revenue of Infosys grown from 70.5 thousand crores in FY18 to 1.46 lakhs Crore in FY23, at a compound annual growth rate (CAGR) of 15.8%. Where, the net margin averaged at 18.7%, which peaked at 23.2% in FY18 and dropped the most to 16.8% in FY23, further it has dropped to 15.8% during the 9-month period of FY24.
As per recent quarter, Infosys has generated 59% of its revenue from North America and a total of 97.6% earned outside India, which can also benefits the company from favorable USD – INR currency depreciation rates, which potentially increasing margins with no additions in operations.
The Financial stability of Infosys has been very robust, with minimal insolvency risk due to low liabilities and a current asset to total liability ratio of approximately 1.42 as per their recent annual report. The equity portion grew at a CAGR of 3.7% from 64.9 thousand Crores in FY18 to 80.07 thousand Crores in FY23, with a notable increase of 4275 Crores in the last 9 months. The average return on equity (ROE) stands at 27%, which peaked to 32.5% in FY23.
From the above chart we can note that, the efficiency of the company has peaked in FY19 and FY20, with each employee generating revenue of 0.46 and 0.48 Crores respectively, and each retaining a net gains of 8.6 lakhs and 8.9 lakhs in FY19 and FY20 respectively. However, the company’s performance slowed after FY20, in line with COVID-19 pandemic, peak inflation, and high-interest rates economic conditions, reducing average revenue to 0.36 Crores and net gains to 6.6 lakhs per employee in FY22.
By FY24 (YTD 9 months), the employee count decreased by approximately 45,500, which increased the average revenue generated by each employee to 0.36 Crores (When annualized to 0.48 Crores) and net gains to 5.7 lakhs (annualized to 7.5 lakhs).
From this, with no significant shifts in current economy and with company, we can expect the firm to obtain or it is optimal functioning or even surpass, if the global conditions added an extra advantage.
Date - 29th Feb '24; Source - Company Annual reports ;
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