Infosys Q2 Earnings: PhillipCapital expects Infosys net profit to rise 10.2 per cent to Rs 6,844.40 crore over the previous fiscal, while sales will grow 4.8 per cent to Rs 40,867 crore over the previous fiscal.
Infosys Ltd may report a 10-15 per cent year-on-year growth in net profit in the September quarter on a 5 per cent rise in sales. In-Tech acquisitions will aid growth. Revenue in constant currency terms is expected to outperform Tier 1 peers on a sequential basis. The Salil Parekh-led IT major may also raise its revenue guidance for the fiscal year, even as it may retain its margin guidance. Margins for the quarter may expand, but marginally.
All eyes will be on interim dividend, commentary on FY25 demand environment, especially discretionary spending. Deal TCV and pipeline, margin leverage, attrition, pricing will all be on investors’ radar today.
“While investors are now more optimistic about the sector, evidence of growth recovery, TCV deals and management commentary would still be needed to cement the growth recovery story,” said Kumar Rakesh, IT & Auto analyst at BNP Paribas.
PhillipCapital expects Infosys net profit to grow 10.2 per cent year-on-year to Rs 6,844.40 crore, while sales will grow 4.8 per cent year-on-year to Rs 40,867 crore. EBIT margin may expand 20 basis points year-on-year to 21.4 per cent. Dollar revenue may grow 3.4 per cent year-on-year or 3.5 per cent quarter-on-quarter to $4,877 million. CC revenue growth is expected to be 2.6 per cent quarter-on-quarter driven by large deals, in-tech integration and recovery in the BFSI vertical in the first quarter.
Phillip Capital said, “Margins are expected to improve by 30 bps driven by strong growth and operational efficiencies (Project Maximus). We expect Infosys to raise FY25 growth guidance in CC to 4-5 per cent from 3-4 per cent due to strong H1 and lower ask rates in H2. We expect EBIT margin guidance to remain intact at 20-22 per cent.”
Sharekhan estimates that Infosys’ profit will grow by 10.4 percent to Rs 6,856 crore. The company’s sales are expected to grow by 5.1 percent year-on-year to Rs 40,987 crore. Operating profit margin is expected to grow 10 percent year-on-year to 24.3 percent.
Infosys is expected to report revenue growth of 3.2 per cent in CC terms on a quarter-on-quarter basis, driven by a 70 bps cross-currency tailwind, led by an improvement in BFSI to report a growth of 3.9 per cent on-quarter.
Emkay Global expects Infosys to raise its revenue growth guidance for FY25 to 3.5-4.5 per cent CC YoY (currently 3-4 per cent), while retaining EBIT margin guidance at 20-22 per cent.
“We expect revenue growth of 3.2 per cent q-o-q in CC terms and 3.6 per cent q-o-q in dollar terms – with 1 per cent contribution from the Intech acquisition. EBIT margin is expected to improve 35bp q-o-q, driven by operating leverage and Project Maximus. We believe Infosys will raise revenue growth guidance to 3-5 per cent cc-o-y (from 3-4 per cent) and maintain margins of 20-22 per cent for FY25,” Nuwama said.
The brokerage firm estimates Infosys’ second quarter profit to be Rs 7,154 crore, up 15.2 per cent from the same quarter last year. The brokerage firm estimates sales to grow 5.2 per cent to Rs 41,023 crore.
