FY25 guidance - revenue growth of 1%-3% and operating margin of 20%-22% BENGALURU, India, April 18, 2024 /CNW/ -- Infosys (NSE: INFY) (BSE: INFY) (NYSE:INFY), a global leader in next-generation digital services and consulting, delivered $18.6 billion in FY24 revenues with a growth of 1.4% in constant currency and operating margin of 20.7%. Free Cash Flow was strong at $2,882 million, an increase of 13.7% over FY 23. Large deal TCV for FY24 was highest ever at $17.7 billion, with 52% being net new. Q4 revenues were at $4,564 million, flat year on year and decrease of 2.2% sequentially in constant currency. Large deal TCV for the quarter was $4.5 billion, with 44% being net new. Operating margin for the quarter was 20.1%, a sequential decrease of 40 bps. Free Cash Flow was robust at $848 million. "We delivered the highest ever large deal value in the financial year 2024. This reflects the strong trust clients have in us. Our capabilities in Generative AI continue to expand. We are working on client programs leveraging large language models with impact across software engineering, process optimization, and customer support, said Salil Parekh, CEO and MD. "I would like to thank our 317,000 employees across the world that are working to create value for our clients." he added.   1.4% FY 20.7% FY  20.1% Q4  Operating Margin 10.0% FY  30.2% Q4 YoY EPS Increase (₹ terms) $17.7 Bn FY $4.5 Bn Q4  Large Deal TCV $2.9 Bn FY  Flat Q4  $848 Mn Q4 YoY CC Growth Free Cash Flow   Guidance for FY25: Revenue growth of 1%-3% in constant currency Operating margin of 20%-22% 1. Key highlights: For the quarter ended March 31, 2024 For year ended March 31, 2024 - Revenues in CC terms remained flat YoY and declined by 2.2% QoQ - Revenues in CC terms grew by 1.4% YoY   - Reported revenues at $4,564 million, growth of 0.2% YoY  - Reported revenues at $18,562 million, growth of 1.9% YoY - Operating margin at 20.1%, decline of 0.9% YoY and 0.4% QoQ - Operating margin at 20.7%, decline of 0.3% YoY   - Basic EPS at $0.23, increase of 28.9% YoY  - Basic EPS at $0.77, increase of 7.3% YoY - FCF at $848 million, growth of 18.9% YoY ; FCF conversion at 88.4% of net profit - FCF at $2,882 million, growth of 13.7% YoY; FCF conversion at 91.0% of net profit "Free cash flow of $848 million in Q4 was highest in the last 11 quarters driven by our relentless focus to improve working capital cycle. Consistent with the objective of giving high and predictable returns to shareholders, the Board has approved the capital allocation policy under which the company expects to return 85% over the next 5 years and progressively increase annual Dividend Per Share", said Jayesh Sanghrajka, CFO. "Operating margin expansion in the medium-term and improving cash generation continue to remain our priorities underpinned by early success in Project Maximus", he added. 2.  Capital Allocation For the Financial Year 2024, the Board recommended a final dividend of `20 per share (0.24 per ADS) and additionally a special dividend of `8 per share (0.10 per ADS*). With this, the total payout over FY20 – FY 24 will be 85% of Free Cash Flow, in line with our capital allocation policy announced earlier. The Board in its meeting held on April 18, 2024 has reviewed and approved the capital allocation policy for the next 5 years from FY25 – FY29 after taking into consideration the strategic and operational cash requirements as below. "Effective from financial year 2025, the Company expects to continue its policy of returning approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi-annual dividends and/or share buyback/ special dividends subject to applicable laws and requisite approvals, if any." Under this policy, the Company expects to progressively increase its annual Dividend Per Share (excluding special dividend if any). Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS. Dividend and buyback include applicable taxes. *USD/INR rate of `83.41 3.  Update on India Income Tax Orders During the quarter ending March 31, 2024, the Company received orders under sections 250 and 254 of the Income Tax Act, 1961, from the Income Tax Authorities in India for the assessment years, 2007-08 to 2015-16, 2017-18 and 2018-19. These orders confirmed the Company's position with respect to tax treatment of certain contentious matters. As a result, interest income (pre-tax) of $232 million was recognized and provision for income tax aggregating $63 million was reversed with a corresponding credit to the Statement of Profit and Loss. Also, upon resolution of the disputes, an amount aggregating to $196 million has been reduced from contingent liabilities. 4.  Update on Financial Services Client During Q4, we had rescoping and renegotiation of one of the large contracts in the financial services segment leading to a one-time impact of approximately 100bps in Q4. Nearly 85% of the scope of the contract continues as-is. 5.  Client wins & testimonials Infosys announced a strategic collaboration with Musgrave to help automate their IT operations by leveraging its industry leading AI and Cloud offerings, Infosys Topaz and Infosys Cobalt. Stephen Mckenna, Chief Technology Officer, Musgrave, said, "I am delighted by our recently announced collaboration with Infosys, which will enable us to leverage Infosys' expertise and resources to deliver innovative solutions to all our customers and retail partners. Musgrave has always been committed to providing our customers with the best possible service, and this collaboration is a testament to that commitment. We are confident that this collaboration will result in new and exciting products and services that will benefit all our customers." Infosys collaborated with PROG Holdings, Inc. to bring AI-powered experiences to their customers and intelligent automation to their operations, as an integral part of PROG Holdings' ongoing cloud and AI-focused technology modernization and innovation efforts. Steve Michaels, President and CEO of PROG Holdings, said, "We look forward to working with Infosys to develop and enhance key systems that positively impact the speed to market, agility, and scalability of key PROG Holdings technologies and platforms. We expect our collaboration with Infosys will reduce friction for both our customers and retail partners, further solidifying PROG Holdings' position atop the virtual lease-to-own industry we helped create twenty-five years ago." Infosys collaborated with Pacific International Lines (PIL) to accelerate their digital transformation initiative by helping revamp PIL's existing customer portal and deploying a scalable and modern technology platform, aimed at creating a positive impact for PIL's key stakeholders across the shipping and logistics ecosystem. Lionel Patrice Chatelet, Chief Commercial Officer, Pacific International Lines (PIL), said, "We are looking for a partner who can not only bring technology but also play an advisory role in the journey of transformation. Infosys brings together a strong combination of right capabilities as well as highly collaborative ways of working. We are delighted to collaborate with Infosys." Resolution Life Australasia collaborated with Infosys to virtualize its mainframe systems by enabling a seamless migration to the cloud, enhancing the overall customer experience. Peter Histon, CIO of Resolution Life Australasia, ...