Bengaluru-based IT firm Infosys has announced that it will be paying out 100% variable pay in Q2 along with a one-time special incentive to junior level employees for the July-September quarter. Additionally, it is also rolling out salary increases and promotions across all levels effective January 1, 2021.
This announcement from Infosys comes on the back of the company registering a 20.5% growth in net profit at Rs 4,845 crore for the second quarter of FY21, as compared to the same quarter last year. Revenues grew by 2.2% in constant currency basis, with digital revenues coming in at $1,568 million, accounting for 47.3% of Infosys' business. Operating margins came in at 25.4%, an increase of 370 basis points year-on-year.
Infosys also declared an interim dividend of Rs 12 per share.
“The strength and resilience of Infosys was fully visible in Q2 with operating metrics witnessing a healthy increase, broad-based growth, highest ever large deal TCV at $ 3.15 bn and attrition reducing to single digits. Employees have been a critical part of our success. As a recognition of their stellar performance, we are giving 100% variable pay along with a special incentive for Q2. Additionally, we are rolling out salary increases and promotions across all levels effective Jan 1st,” Pravin Rao, COO of Infosys said in a statement.
The company also increased its revenue guidance to 2-3% in constant currency terms and margin guidance to 23-24%.
In terms of employees, voluntary attrition for IT services declined to 7.8% from 18.3% in Q2, with the total headcount now at 2,40,208, of which 37.8% are women.
Currently, Pravin said that 99% of its workforce is working from home globally, with Europe seeing some return to office.
“Our second quarter performance is a clear reflection of our ability to help clients on their digital transformation journeys. Our digital and cloud capabilities combined with intense client relevance are helping us achieve differentiated results in the market as is visible in 2.2% year on year overall revenue growth and 25.4% growth from digital offerings, which now are at 47.3% of revenues”, said Salil Parekh, CEO and MD. “Increase in revenue and margin outlook for FY 21 is due to the continued trust clients have in us. I am extremely proud of our team for achieving these results in challenging business conditions globally.”
On changing H-1B regulations in the US, Infosys said that its aggressive localisation in the country has benefitted the company, minimising the impact of changing regulations.
“Since 2017, we have aggressively embarked on a localisation strategy and recruited more than 13,000 employees locally. Currently 63% of our workforce in the US is local and visa independent. We have also expanded services in Mexico, Canada to be able to offer services in the same time zone,” Pravin said.