LIVE: Infosys Q1 Results: Net Profit ₹5,945 cr | Management Addresses Press Conference | CNBC TV18

Thanks, Rishi, and good evening, good afternoon. Welcome to everyone here. It's always wonderful to have all of you on the campus. I'm sure you've seen there's a lot more people, and we're benefiting from that. We've had a very strong Q1. Q1 growth was solid at 4.2 percent year-on-year, 1 percent Q-on-Q in constant currency. We had 20 percent growth in manufacturing, 13 in life sciences, and European business grew by 10 percent. Operating margin was strong at 20.8 percent. The large deals value for Q1 was $2.3 billion, with 56 percent net new, including one mega deal win. We also announced a mega deal worth two billion dollars after Q1 close but before today's results. With strong large and mega deal wins, we are building well for the future. We're delighted that Topaz, our generative AI platform, is resonating with clients. We're working on 80 generative AI projects, covering large language models for software development, text, document, voice, and video. Internally, we've developed generative AI tools based on open-source platforms focused on software development. We've trained 40,000 employees, and see generative AI and Topaz as transformational for clients. In the short term, some clients are stopping or slowing transformation programs and discretionary work, especially in financial services (mortgages, asset management, investment banking, payments), Telecom, high-tech, and parts of retail. Despite winning two mega deals recently, we have a strong pipeline. Revenue from these deals is expected towards the later part of the financial year. Therefore, we're changing our revenue growth guidance for this financial year to between 1 percent and 3.5 percent in constant currency. We've launched a comprehensive margin expansion program across five areas: pyramid efficiency, automation, improvements in critical portfolios, reducing indirect costs, and deriving value across our portfolio. We aim to improve operating margins in future periods. Operating margin guidance remains between 20 and 22 percent. With that, let's open it up for questions.

On revenue growth guidance, we had a good Q1 with strong large and mega deals. However, some deal signings and start dates have been delayed, pushing revenue from these deals to later in the financial year. Through the quarter, we saw volume reductions in clients from impacted industries like financial services and Telecom, where transformational projects or decision-making slowed. Combining these factors, we adjusted the growth guidance range for the full year. Regarding margins, we have strong discipline and have put in place a margin expansion program with five elements focused on efficiency, utilization, and reducing indirect costs. Q1 operating margin at 20.8 percent was towards the middle of the range, and we're comfortable with the guidance. For hiring, we have a target for the year but will assess based on the demand environment and attrition. Attrition is stable, trailing 12-month attrition down to around 17 percent, which influences recruitment decisions. We haven't specified a hiring target.

Decision-making has slowed across large programs. Transformation programs funded from cost efficiency are seeing delayed starts, pushing revenue impact to later in the year. On generative AI, we're excited about 80 projects; AI programs typically have good margins, focusing on productivity and growth. At this stage, it's a start, so we'll see the margin impact as it scales.

The guidance discussion is similar. Large and mega deal wins boost confidence in client collaboration, especially on cost efficiency. However, there have been delays in program starts and decision-making, coupled with volume reductions in industries like financial services and Telecom, leading to the guidance cut.

We now share deal values aligned with regulations; previously, we didn't disclose deal values, so comparisons are difficult. On compensation, it's under active consideration, and we'll announce soon.

On guidance, at the quarter start, we had views on large deal timings and transformation volumes. We saw delayed starts for large deals and volume changes in discretionary projects, combining to set the guidance range. Looking ahead, growth is expected later as deals deliver revenue. We see consolidation, cost efficiency, and automation deals, but not short-term ROI projects—deals are focused on efficiency over transformation. On leadership, we've announced a new structure with incredible talent stepping into roles, and Infosys will continue producing such leaders. Compensation changes are under consideration.

On volumes, clients in industries like financial services and Telecom are maintaining cost discipline by reducing discretionary projects short-term, leading to less attention in Q1.

Announced large and mega deal wins are already in the guidance. As the year progresses, more wins could have positive or negative impacts, but current guidance reflects what we see today.

Yeah, if you see above 50 percent, that hasn't changed.

We don't disclose AI portfolio percentage, but generative AI is transformative, changing everything. We're working on software development, text, voice, and video areas, expanding our work. Topaz, our leading generative AI platform, with 80 active projects, is moving rapidly. The pricing environment remains stable. We see some increases from COLA, occasional discounts, but overall stability.

We monitor our portfolio daily, weekly, monthly. We're not focused on when things stop or start. We have growth drivers in digital transformation, cloud, and generative AI, ready for client needs. On the other hand, we have deep capability in cost efficiency and consolidation, as seen in recent wins. We don't have a specific view on when changes will occur.

In Europe, on a constant currency basis, we grew 10 percent, so it's an area of focus and expansion. For smaller projects, we don't see a difference; we win both larger and smaller programs. However, some discretionary projects from clients' perspective have volume impact. For large mega deals, we see good traction and a strong pipeline.

We see good traction in generative AI and mega deals, but discretionary volumes are slowing, so it's not one-size-fits-all. For classification, large deals are $50 million or larger, and mega deals are $500 million or larger.

We don't comment on that externally.

Training covers both open-source and proprietary generative AI platforms from various tech companies. Internally, we've built tools on open-source platforms for software development, like new code, enhancements, and migration. We've rolled out AI assistants for employees in delivery, sales, training, and knowledge management. We're becoming an AI-first company, driving change internally and externally.