Infosys gains ahead of Q1 results. Here’s what analysts said

NEW DELHI: Shares of were trading marginally higher in Wednesday’s trade ahead of its June quarter results later in the day.

The second-largest IT major is expected to report a 24-30 per cent year-on-year rise in profit on a 17-18 per cent growth in revenues. The IT firm is seen upping its FY22 revenue growth forecast to 13-15 per cent from 12-14 per cent on a constant currency basis. Infosys may stick to its margin guidance of 22-24 per cent, analysts said.

At 9.26 am, the scrip was trading 0.51 per cent higher at Rs 1,552.80 on BSE.

expects deal momentum to remain healthy, as clients continue to fast track their digital and cloud journey. “We expect margins to remain flat QoQ, with healthy growth offsetting the impact of large deal-related transition costs, and normalisation of utilisation & offshore mix,” the brokerage said.

It said the management commentary on the deal pipeline and pace of deal conversion; outlook on the retail and communications vertical, ramp-up of the Daimler deal and potential margin tailwinds in H2FY22 will be keenly followed.

“With record large deals won in FY21, we would seek management’s commentary on the strength of the pipeline and also the quarter’s TCV. Last year, it was at $1.7 billion. We are expecting a growth of TCV in the teens. We would also keenly follow the extent of margin dilution from some of the large deals won in FY21,” said Nirmal Bang Institutional Equities.
expects the IT firm to report a 4 per cent rise in sequential sales growth in constant currency (CC) and a similar dollar revenue growth, as it sees no cross-currency impact.

EBIT margin is seen improving 20 basis points sequentially on the back of revenue growth and other operating efficiencies, it said. The brokerage sees profit rising 28.3 per cent YoY to Rs 5,432.60 crore in the June quarter on a 17 per cent rise in net sales to Rs 27,711.70 crore. Ebitda margin is seen at 27.8 per cent against 27.6 per cent in March quarter and 25.9 per cent in the year-ago quarter.

“We expect the company to revise its full-year revenue growth guidance upward to 13-15 per cent CC YoY, while retaining 22-24 per cent EBIT margin guidance,” it said.

Phillip Capital said it expects dollar revenue growth at 4 per cent sequentially and margins to contract 80 bps QoQ. This brokerage pegs Infosys’ profit at Rs 5,262 crore, up 23.6 per cent YoY. It sees rupee revenues at Rs 27,697 crore, up 17 per cent YoY.

Prabhudas Lilladher’s profit projection of Rs 5,518.50 crore suggests a 30.4 per cent growth on yearly basis. It sees revenues rising 17.5 per cent YoY at Rs 27,805 crore.

“We expect strong growth of 4.2 per cent QoQ CC growth, which will be led by strong broad-based growth across verticals, ramp-up of large deals, and seasonal strength. We expect margins to decline by 34 bps QoQ driven by potential higher subcontracting costs due to strong demand momentum and wage pressures due to higher attrition. We expect utilisation to come down in this quarter from all-time high levels of 87.7 per cent in Q4FY21,” it said.

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