The net profit of Infosys in the fourth quarter of 2022-23 failed to beat estimates even as the Bangalore-based firm slashed its guidance for 2023-24 — further sagging the morale of the markets, which have given the results of TCS announced on Wednesday the thumbs-down.

The company is buffeted by an uncertain demand environment, with clients pruning spends in some segments such as BFSI, which is feeling the pinch of the overseas banking turmoil.

Infosys on Thursday reported a consolidated net profit of Rs 6,128 crore in the quarter ended March 31, 2023, against Rs 5,686 crore in the same period of the previous year, a growth of nearly 8 per cent.

However, on a sequential basis, the net profit marked a decline of 7 per cent over Rs 6,586 crore reported in the third quarter.

Analysts had forecast its net profit to come in the region of Rs 6,300-6,500 crore.

While the fourth quarter is a seasonally weak period, IT services firms have been facing headwinds in the form of cautious clients postponing their discretionary spending and slowing down the closure of any technology transformation deals across various sectors.

For the quarter ended March 31, 2023, Infosys saw its revenues coming in at Rs 37,441 crore compared with Rs 32,276 crore in the year-ago period, an increase of 16 per cent.

Revenues were lower compared with thepreceding quarter’s number of Rs 38,318 crore.

For the full year, revenues grew 20.65 per cent to Rs 146,767 crore from Rs 121,641 crore in 2021-22.

Revenues in constant currency — adjusted for exchange rate fluctuations— rose 15.4 per cent, missing its own guidance of 16-16.5 per cent growth given after the third quarter results.

There was more disappointment as Infosys projected revenue growth for 2023-24 in constant currency terms at 4-7 per cent.

While some brokerages had expected the company to guide for 5-7 per cent growth, there were others who had expected growth to be 6-8 per cent.

The constant currency growth declined 3.2 per cent sequentially in the fourth quarter which is reportedly the worst in at least a decade.

Speaking to the press after the announcement of the results, Salil Parekh, the Infosys CEO & MD, said that during the quarter, the company witnessed some unplanned ramp-downs across sectors such as telecom, hi-tech and retail.

Within financial services, sub-segments such as mortgages, asset management and investment banking took a hit.

On the revenue guidance for this fiscal, Parekh said it took into account the large deal wins for the quarter and the year, and the current environment.

He said Infosys has a strong financial services business in the US and it works with a large number of banks.

Large deal wins stood at $2.1 billion for the fourth quarter and $9.8 billion for 2022-23.

Operating margin for the quarter was 21 per cent which was lower than 21.5 per cent in the preceding three months.

Infosys has guided that its margins during this fiscal will come between 20 per cent and 22 per cent.

Big payout

Akshata Murty, the wife of Britain’s Prime Minister Rishi Sunak, stands to earn Rs 68.17 crore in dividend income from her shareholding in Infosys.

Murty, daughter of Infosys co-founder Narayana Murthy, held 3.89 crore shares of Infosys at the end of December.

Infosys declared a final dividend of Rs 17.50 per share for FY23. If she retains her shareholding till the record date, June 2, she would get Rs 68.17 crore.

Together with an interim dividend of Rs 16.50 a share declared in October last year, she would get Rs 132.4 crore.