Infosys Ltd; Disappointing Quarter Misses Revenue Margins

BUY

CMP: Rs1389  

Target Price: Rs1620

Infosys reported disappointing operating performance in Q4. Unplanned ramp down of projects, delay in decision-making and some one-off revenue impacts, including a few client-specific project cancellations, hit revenue growth in Q4, leading to the revenue-guidance miss. Mgmt highlighted weakness in parts of BFSI (mortgage, asset management, and investment banking), telecom, retail, and hi-tech which subdued growth. Among geographies, USA is more impacted than Europe. Infosys has guided for 4-7% YoY CC revenue growth for FY24, implying 1.7-2.9% CQGR over the next four quarters. After missing revenue growth guidance for FY23, Infosys is likely to guide conservatively for FY24, given increased caution in spending by clients and prevailing macro uncertainties; but the asking rate at the upper-end appears to be demanding and may require support of some mega-deal closures during FY24. Mgmt has guided for 20-22% EBITM for FY24 which is 100bps lower than the guided margin range at beginning-FY23. Despite near-term challenges posed by the tough macro environment, we believe Infosys is well positioned to capture the growth opportunities across digital transformation, cost efficiency and consolidation-led deals over the medium term. We cut our EPS by 4.4-6.3% for FY24E/25E, factoring-in the disappointing Q4. We maintain BUY on the stock, with revised TP of Rs1,620/share (earlier, Rs1,700) at 22x Mar-25E EPS.

Result summary: Revenue declined by 2.3% QoQ to USD4.55bn (-3.2% QoQ/+8.8% YoY CC), below our expectations of USD4.71bn. EBITM declined by 50bps QoQ to 21.0%, coming in 70bps below our expectation, on account of lower utilization (-70bps), a one-time revenue impact (-90bps) – partially offset by cost optimization (+50bps), and reduction in provisions for post-sales client support (+60bps). Adj. profit stood at Rs61.3bn, below our expectations due to the miss in operating performance. Growth was led by Retail (2.5% CC QoQ) and Others (15.1%), while Communication (-11.2%), Hitech (-7.1%), BFSI (-3.7%), Life sciences (-3.6%), EURS (-3.5%), and Manufacturing (-1.2%) posted a weak performance. Based on Infosys’ deal intake, deal pipeline including a few mega deals, and current assessment of the evolving macro situation, Management has guided for 4-7% YoY CC revenue growth in FY24. What we liked: Strong FY24 revenue growth guidance, moderation in attrition (LTM attrition down 340bps QoQ to 20.9%/quarterly annualized attrition down by >400bps QoQ), steady deal intake, healthy cash generation (73.5% OCF/EBITDA in Q4). What we did not like: Operating performance miss in Q4, lower-than-expected margin guidance.

Earnings call KTAs: 1) Company highlighted that it is witnessing increased client interest for efficiency, cost and consolidation opportunities, resulting in a strong large-deal pipeline. 2) Management indicated that Company’s exposure to regional banks is <2% of revenue. Macro uncertainties, softness in mortgage, asset management and investment banking are weighing on BFSI demand. A strong deal pipeline gives growth visibility for FY24. 3) Discretionary spend in Retail continues to be under pressure, while Manufacturing is showing resilience on the back of large-deal ramp-ups and benefits in vendor consolidation. 4) Company indicated that currently, North America presents a more challenging operating environment than Europe. 5) Owing to softness in demand, utilization in Q4 stood at 80% (excluding trainees), which the company expects to gradually improve. 6) The headcount declined by 3,611 employees in Q4. Management indicated calibrated hiring in FY24 meeting growth & margin aspirations. 7) Infosys signed 17 large deals with a combined TCV of USD2.1bn (21% net new) in Q4, split across geographies (10 in North America and 7 in Europe) and verticals (5 in Manufacturing, 4 in BFSI, 3 in Communication, 2 each in Life sciences and Hitech, and 1 in EURS). 8) Company guided for the mid-point of FY24 EBITM to be closer to the FY23 EBITM, to retain flexibility. Higher utilization, flattening pyramid, subcon optimization, improving realization, and automation-led efficiencies remain the key margin levers. 9) Company declared final dividend of Rs17.5 per share.

Godrej Interio Partners With IIT- Bombay To Create State-Of-The-Art Laboratory

~ Aims to grow market share in the laboratory business by 25% by FY28

Godrej Interio, India’s leading furniture solutions brand in home and institutional segments, successfully revamped IIT Bombay’s ‘Class of 1980 Design and Making Lab’. The idea behind this revamp was to provide state-of-the-art facilities, empower research-based education and revolutionize learning practices for students. Some of the unique innovative furniture solutions like modular furniture, fume hood, lab storage, MEP services & turnkey projects form a core part of the lab’s revamping. Godrej Interio is currently executing similar projects for state medical colleges, research institutes and government institutes across India.

The refurbished lab is an important component of the Institute's larger #MakerSpace programme that aims to provide students with a comprehensive education through exposure to state of the art thematic labs. The lab revamp was largely adapted from the recommendations made under the updated National Education Policy, that emphasised hands-on experimental-based learning. It will give young pioneers at IIT Bombay the opportunity to study modern design and production processes at the start of their academic careers. Godrej Interio designed the space and installed specialised laboratory furniture and modular workstations at the Class of 1980 Design and Making Lab.

Commenting on this successful execution, Sameer Joshi, Vice President, Marketing (B2B), Godrej Interio, said, “We’re happy to have partnered with IIT Bombay to help build a state-of-the-art lab for young and aspiring students that will further their dreams of becoming pioneers for the nation. At Godrej Interio, we plan to grow our market share in our laboratories business by 25% over the next 5 years. Through our offerings of specialized turnkey solutions, domain knowledge and design excellence, we plan to cater to esteemed educational and research institutes enabling enhanced learning.”

Prof. Ravindra D. Gudi, Dean, Alumni & Corporate relations, IIT Bombay shared his experience with the Godrej Interio team, saying, “I am thrilled to see our laboratory space come to life with the design excellence from Godrej Interio. The innovative designs and superior quality have truly transformed the space students will study in. We are delighted to see our laboratory space being revamped by Godrej Interio, a pioneer in modernizing the laboratory space. The design idea followed during the project will also act as a model for other institutes across the country to align with the tenets of the National Education Policy.”

About Godrej Interio:

Godrej Interio is India’s leading premium furniture brand in both home and institutional segments with a strong commitment to sustainability and centers of excellence in design, manufacturing and retail.

Led by the largest in-house design team in the country in the furniture category and awarded with 34 India Design Mark Awards till date, GODREJ INTERIO aims to transform spaces with its thoughtfully designed furniture to create brighter homes and offices with products that have the highest design quotient in aesthetics, functionality, and technology. With consistent pursuit of excellence and a special focus on health and ergonomics, GODREJ INTERIO’s product portfolio comprises of a wide range of solutions.

Today, Godrej design and manufacture furniture for office spaces, homes, educational institutes, healthcare facilities, laboratories and more. Along with furniture, the company offers Audio Visual and 360 Degree Turnkey solutions. Each of our product range revolves around comfort and aesthetics while delivering well-designed, long lasting, and functional furniture solutions. In short, Godrej Interio helps the consumers to make every space the perfect setting for their myriad moods and moments.

Currently present in over 450 cities with 450 exclusive showrooms and 520 dealer outlets, is one of the largest divisions of Godrej & Boyce Mfg. Co. Ltd., part of the Godrej Group, one of India's largest engineering and customer product groups.

Godrej Interio has 7 manufacturing facilities situated at Mumbai, Khalapur, Haridwar, Shirwal, and Bhagwanpur. GODREJ INTERIO is widely known for its comprehensive sustainability certifications for its products in furniture category.

BUILD. & Tiger Shroff Announce The Launch Of BUILD.PROWL Range Of Sports Supplements

BUILD., a leading Indian sports nutrition brand, has partnered with PROWL, the active lifestyle brand by Bollywood actor Tiger Shroff, to introduce a range of high-quality sports nutrition supplements designed to support active individuals in achieving their fitness goals.

The new BUILD. PROWL Elite Series introduces six new products in unique flavours like Fresh Brew Coffee, Delicious Chocolate, Watermelon, Orange, Raspberry, Kiwi, etc. for the consumers-

·         HydroActive ISO 8

·         Lean Muscle Enhancer

·         Pro Shredder

·         Pre-Game Pro

·         Liquid L-Carnitine Pure Burn 3K

·         EAA Rapid 9

Tiger Shroff made the initial announcement on his Instagram profile, sharing an experience video, and speaking about the collaboration. In the video, he speaks about his passion for fitness and how his association with BUILD. helps him stay aligned with his fitness regime. Going forward he highlights how the HydroActive ISO 8 is specially designed to aid improved digestion that makes one feel light and energetic with amazing flavours. He gives a message that as humans, movement is essential for a healthy lifestyle, both physically and mentally and that we should keep moving in our own ways. 

Soumava Sengupta, CEO, BUILD. said, “We're thrilled to team up with PROWL to launch this range of products under BUILD. As a brand, we are committed to helping people lead a healthy and active lifestyle, and this collaboration allows us to reach even more fitness enthusiasts with our products. Our supplements are designed to provide the necessary nutrients to fuel the body during intense workouts, and with Tiger Shroff's passion for fitness, we're confident that this collaboration will be a game-changer in the sports nutrition market.”

The BUILD. PROWL range is a testament to the shared passion for fitness and commitment to helping individuals achieve their fitness goals. Created by a team of expert nutritionists and fitness professionals, the range includes pre-workout, post-workout, recovery formulas, mass gainers, as well as whey protein and amino acid supplements. Each product is formulated with premium quality ingredients that are scientifically proven to enhance athletic performance and support muscle growth and recovery. The video is live on BUILD.’s social media platforms, including YouTube and Tiger Shroff’s Instagram.

Excited about the collaboration, Tiger Shroff said, “I'm thrilled to be working with BUILD. to bring high-quality sports supplements to the Indian market. As someone who takes fitness seriously, I understand the importance of proper nutrition, and with our combined passion and expertise, I believe we can inspire a new movement in fitness in India and empower individuals to live a fit and healthy lifestyle.”

The BUILD. PROWL range is available in 500+ speciality sports nutrition stores, its website www.buildyourgoals.com, top gyms, and leading e-commerce platforms like Amazon. The BUILD. PROWL Elite and Advanced Series come in a variety of flavours and are made available to customers for a price starting at INR 2,999.

About BUILD.  

BUILD. is a brand from Pursuit of Wellness Pvt. Ltd., incorporated a year ago with the objective of helping Indians lead healthier lives with quality nutrition and supplementation products. Pursuit of Wellness is an off shoot of a corporation which has been in the business of importing and distributing sports nutrition supplements for leading brands pan India, for the last seven years. BUILD. as a brand is committed to provide its users quality nutrition at par with the best available in the world. 

BUILD. and PROWL (Tiger Shroff) over the next 5 years will launch multiple products in sports nutrition and general wellness category with a mission to inspire Indians for a fitter and healthier life. These products will be available in speciality/ modern retail and via e-commerce.

Disney Star Netwok Recods Massive Growth In The South Markets

-          Karnataka recorded a 30% growth in consumption, clocking 680 crore minutes for the first 10 matches, highest ever consumption* in IPL history -

-          AP/Telangana witnessed a 33% consumption growth -

Disney Star, the official television broadcaster of TATA IPL 2023, has witnessed a massive growth in regional viewership of the marquee tournament. The Southern markets witnessed a substantial growth of 21% compared to the last edition, with AP/Telangana witnessing a 33% consumption growth and Karnataka recording a 30% growth, clocking 680 crore minutes for the first 10 matches, highest ever consumption* in IPL history. Furthermore, the Hindi Speaking Markets (HSM) have recorded the highest viewership in IPL history with 20.4 crore fans tuning in for the first 10 matches, 29.5% increase in comparison to the last edition. HSM also clocked a massive 4380 crore minutes of watch time, 25% increase in comparison to last year. Significant centers for growth in HSM markets are UP, Bihar, MP, Delhi, Rajasthan, Maharashtra, Punjab, and Haryana.

Star Sports Spokesperson, said, “We are thrilled with the response we have received for our regional feeds. Our feeds have been designed to bring fans closer to the game and provide an engaging experience. We have created surround programming for each language, keeping their unique culture in mind and this has helped us connect with fans in different parts of the country and provide them with an experience that is tailored to their needs.”

The increase in consumption for the South Markets can be attributed to the region-specific themes and the vast range of in-house experts like Gundappa Vishwanath, MSK Prasad, K Srikkanth, L Balaji, S Badrinath, Murali Vijay and S Sreesanth among others bringing fans closer to the game. The launch of Star Sports Telugu HD along with the association with legendary actor & cricket enthusiast Nandamuri Balakrishna - has helped fans in AP/Telangana markets to connect further with the tournament. Adding to the fan fervor were special initiatives like the IPL trophy tour, #MySocietyStadium, and Fan Buses organized by Star Sports, making it an engaging and unforgettable experience for cricket enthusiasts across the country. 

Star Sports roped Bollywood superstar and sports aficionado Ranveer Singh as its brand ambassador. Ranveer, in his role as 'sutradhaar' for the Incredible League is involved in creating a stream of immersive and entertaining content which brings alive compelling narratives from the marquee tournament. The innovative Hindi feed boasts some of the finest former cricketers as experts such as Sunil Gavaskar, Virender Sehwag, Irfan Pathan, Mohammad Kaif, and more allows fans to deep dive into all the action in real-time. Additionally, exclusive association with Rajasthan Royals and Punjab Kings for their new shows ‘Halla Bol’ and ‘Chak De’ has increased consumption by 53% in Rajasthan, and 37% in Punjab & Haryana. Similarly, Star Sports has witnessed a growth of 58% in consumption in UP by delivering engaging surround programming through an exclusive association with KL Rahul for ‘Stars on Star’ and Lucknow Super Giants for a new show ‘LSG Junction’ along with LIVE telecast of select IPL 2023 matches on Star Utsav Movies (FTA) channel to drive sampling and conversions to Star Sports. 

Star Sports has been at the forefront of fueling fandom for sports. The ‘Shor On, Game On!’ campaign by the broadcaster generated significant excitement and support before the tournament. The campaign captured the true essence of fans' passion, excitement, and togetherness while watching the “Incredible League” LIVE on television sets. Disney Star clocked 6230 crore minutes of watch time for the opening 10 matches with a cumulative reach of 30.7 crore viewers for the first 10 matches, both of which are the 2nd highest across IPL History*.

All BARC data for 2+ U+R- for Live Broadcast including PPL on Disney Star Network

*: Other than IPL Editions in Covid Years

Rapido Sets In Motion With ‘Bike Wali Taxi Sabse Saxi’ Campaign On JioCinemas IPL Streaming

* The campaign focuses on feasibility, comfort and affordability bike-taxis provide in crowded and packed traffic cities

Rapido launches its 360 degree ‘Bike Wali Taxi, Sabse Saxi’ campaign aiming to drive consideration for the category in the e-mobility space.

Bike Wali Taxi, Sabse Saxi positions Rapido Bike-Taxi as the ultimate solution for everyday commute by highlighting its key offerings - convenience, quickness, and affordability. With an upbeat jingle and an element of ‘swag’, the films add a coolness quotient to the brand persona.

The campaign created by Enormous comprises four films that showcase Rapido Bike-Taxi as a smart alternative in different scenarios. The first film has been released, where the Bike-Taxi service is pitted against the shortcomings of a crowded bus. The remaining films will be released in the weeks to come.

With a digital-first approach, for the first time, Rapido has collaborated with the OTT platform JioCinema. Capitalizing on the reach and frequency of IPL on the platform, JioCinema serves as the lead channel. This will be followed by TV for amplification, and OOH as the recall channel.

As a part of Rapido’s commitment to resolve daily commute challenges and to improve travel experiences for its customers, Rapido offers an effective solution with completing 10 lakh daily rides in 100+ cities across India. The brand is already a go-to option amongst the masses for its cost-effective, fuel-efficient, and time-saving services during peak traffic hours.

About Rapido Auto: Rapido Auto is one of the leading taxi services spread widely across all of India from Tier I to Tier III cities. The app allows you to book bike taxis and auto taxis with the minimum wait time, and maximum safety and is super easy on your pockets.

How does it work? Download the app on iOS/android, login from your account, and start booking. Once booked, the amount and captain details appear on the homepage and our captains are at the pick-up location in no time. To ensure your safety, our captains carry an additional helmet which is given once the captain arrives and at no additional cost. Your safety is of the utmost importance to us. With Rapido around, let’s keep the traffic excuses at home and explore our cities.

Toyota Kirloskar Motor Launches Its First-Ever On-Line Retail Sales Platform - “Wheels On Web”, For Enhanced Customer Convenience

Toyota Kirloskar Motor (TKM) today announced the introduction of ‘Wheels on Web’ (WOW), an Online Retail Sales platform for Bangalore region. This new platform offers customers, a seamless virtual experience by enabling them to book, purchase and get delivery of their preferred Toyota models at the comfort of their home. Further, WOW provides a real-time information of the status of their booked Toyota product, to augment credibility, transparency, and confidence among the patrons.

The "Wheels on Web" is a Business to Customer (B2C) platform that reflects the company’s core commitment to enhance customer experience in its digital space, enabling hassle-free car buying with innovative features and services.

Some of the best-in-features of “WOW “(Wheels on Web) are as follows:

Offers a complete virtual experience - Customer can now book, buy and enjoy the vehicle delivery at the comfort of their home

Provides digital viewing of the car exteriors, interiors, colour, and variants

Select a host of value-added services – Accessories, Service Packages and Extended Warranty

Customers can even trade-off his / her existing car – offers online evaluation where one can opt for physical car evaluation at the comfort of their home

Customers can choose easy and multiple finance options through selected financial institutions

Multiple payment options via a secured Payment Gateway

Booking amount / full payment OR down payment can be made completely online

Auto Communication via WhatsApp and E-mail at every stage from Booking to Delivery

Individual log-in / account access to check the status of booking details

TKM indicates that its digital contribution to sales has increased by 5 times and the company’s e-bookings has substantially increased by 20 times as compared to past years. TKM's virtual showroom continues to gain popularity with close to 1.3 million customers exploring it annually. With the launch of ‘WOW’, TKM aims to offer an even more enhanced digital experience for its customers. To start with, the platform offers many models like HyCross (gasoline), Hilux, Legender, Camry, Fortuner, and Innova Crysta (GX) facilitating easy and much convenient buying experience for Bangalore region.

In 2021, TKM launched its virtual showroom to provide its customers’ - a digital platform to access and explore its various models and accessories, facilitating 360-degree immersive experience from the comfort of their homes. With this new development, the virtual showroom is well integrated with ‘WOW’ that presents an absolute digital experience to customers, to know and own the Toyota vehicles & services (service packages and extended warranty) with utmost ease.

"In line with our core philosophy of ‘Customer First’, we are continuously striving to deliver ever-better services to the consumers. We believe that our newly launched ‘WOW’ (Wheels on Web), online retail platform, will revolutionize the car buying experience in India, said, Vice President, Sales and Strategic Marketing - Mr. Atul Sood from Toyota Kirloskar Motor.

Further, he added, "Our objective here is to provide value-added services to enable convenient car purchasing processes, facilitating end-to-end transaction including secured online payments as a one-stop-shop. With the availability of our varied models on this platform, we are confident of meeting the growing needs of the consumers at large”.

TKM continues to strongly focus on enhancing the smooth digital experience for its customers and with “Wheels on Web” platform being an integral part of such business plans, it is set to provide a unique, convenient, and reliable online car buying experience for the consumers.

To know more about WOW and make their booking & buying online, we urge the customers to visit Toyota India | Wheels On Web (toyotabharat.com).

Aahwahan Foundation With Infinera India Pvt. Ltd Launches Community Footprint Program To Empower Young Girls

Aahwahan Foundation, a non-profit organization committed to the betterment of society, in collaboration with Infinera India Pvt. Ltd. is proud to announce the launch of its latest initiative, "Community Footprint Program” aimed at empowering young girls from economically weaker sections of society to pursue promising careers in the field of Operations and telecommunication.

The "Community Footprint Program” by Aahwahan Foundation is designed to provide young girls with the necessary skills and knowledge to succeed in the fast-paced and rapidly evolving telecommunications industry. Participants will receive training and mentorship from industry professionals and will have the opportunity to attend workshops, seminars, and networking events. Infinera India Pvt. Ltd. also provided school bags to these young future minds.

Braja Kishore Pradhan Founder and Managing Director, Aahwahan Foundation Said, "We recognize the importance of encouraging young girls to pursue careers in the Operations and Telecommunications fields, and we are proud to be taking an active role in shaping the future of our industry."

With this unique program, 125 high school-aged girls from Karnataka Public School from economically weaker backgrounds can choose their profession in pursuing a career in the field of Operations and the telecommunications industry. The program was initiated to create more awareness towards the importance of education among young girls and to encourage them to be independent in the future.