Synopsis: Infosys is expected to report its Q1 earnings today, with projections of sequential revenue growth of 2-2.5% in constant currency terms and 2-2.2% in dollar terms. Margins are anticipated to be flat year-on-year but slightly improved sequentially.
Infosys Q1 Earnings Preview: The IT firm is expected to report sequential revenue growth of 2-2.5% in constant currency (CC) terms and 2-2.2% in dollar terms.
Margins are anticipated to be flat year-on-year (YoY) but slightly up sequentially.
Under the leadership of Salil Parekh, Infosys Ltd will announce its June quarter results today at approximately 3:45 pm.
The company, the second-largest domestic IT software exporter, will host a press conference at 4:30 pm and a 60-minute conference call at 6 pm.
For the June quarter, Infosys is projected to report a year-on-year (YoY) net profit increase of up to 10%, driven by modest single-digit revenue growth.
Sequential revenue growth is expected to be 2-2.5% in CC terms and 2-2.2% in dollar terms.
Margins are forecasted to be flat YoY but improved sequentially, following a 1% margin impact in Q4 due to a BFSI client renegotiation and rescoping.
Order wins are projected at $5 billion.
Analysts expect positive management commentary but believe the IT firm will maintain its FY25 revenue and margin guidance.
Nuvama Institutional Equities predicts a 10.2% YoY profit rise for Infosys to Rs. 6,551 crore, with a 2.6% YoY increase in sales to Rs. 38,918 crore.
EBIT margin is expected at 20.8%, up 70 basis points from the March quarter due to operating leverage and an exceptional Q4 item.
"We anticipate Infosys will maintain revenue growth guidance of 1-3% CC YoY and margins in the 20-22% range for FY25," it stated.
ICICI Securities forecasts 2% revenue growth in both dollar and CC terms, with traction in Hi-tech, BFSI (from deals announced in Q1, double that of Q4FY24), and the Liberty deal ramp-up.
They predict 3.5% YoY dollar growth for FY25, with a 100 basis points inorganic revenue contribution from the In-semi acquisition.
The deal pipeline is strong, with key deals doubling against Q4FY24.
The order book is expected to be around $5 billion.
The In-semi acquisition is factored in with a 4.5 million quarterly run rate in Q1, and the In-tech acquisition is expected to close in H1FY25.
ICICI Securities estimates Q1 profit at Rs. 6,283 crore, up 5.7%, and sales at Rs. 38,840 crore, up 0.8%.
Antique Stock Broking forecasts CC revenue growth of 2% for Infosys, with a slight cross-currency headwind.
Growth should be driven by ramp-ups in the telecom and BFSI sectors, while sequential manufacturing growth is expected to remain muted.
They believe the company will maintain its FY25 revenue growth guidance of 1-3% in CC terms and margin guidance of 20-22%.
In conclusion, Infosys is set to announce its Q1 results today, with expectations of modest revenue growth and stable margins.
Analysts predict the company will maintain its FY25 revenue and margin guidance, supported by strong order wins and strategic acquisitions.
As always, investors are advised to consult with financial advisors before making any investment decisions based on these projections.
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