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Infosys Q3 preview: Sales seen rising 19% YoY; 2023 outlook pivot for D-Street – Economic Times

is likely to report strong double-digit year-on-year (YoY) growth in both the topline and bottomline for the quarter ended December due to strong deal pipeline and execution.

Consolidated revenue is seen rising nearly 19% on year, and 4% sequentially to Rs 37,890 crore, according to the average of estimates given by 10 brokerages.

The net profit is seen rising 11% on year and 7.2% sequentially to Rs 6,455.40 crore.

The Bengaluru-headquartered software major will release its quarterly numbers after market hours on Thursday.

Furloughs and cross-currency headwinds are likely to restrain the constant currency sales growth for Infosys at about 1.5-1.8% sequentially, said analysts.

Earlier this week, peer

reported a 19% growth in the topline and a 11% rise in the bottomline, but the net profit missed analysts’ expectations.
While the near-term outlook for the IT sector remains murky in view of the economic slowdown in the US and Europe, most analysts expect Infosys to retain its sales growth and margin guidance for the current financial year. Infosys had guided for a 15-16% growth in sales in constant currency terms for FY23, and a 21-22% operating margin, calculated as earnings before interest and tax (EBIT).

For the second quarter in a row, the software major will see an improvement in the operating margin, but this is likely to be lesser than the one seen in the second quarter.

Analysts see a 20-80 basis points expansion in margin sequentially, which is way lower than the 150 bps expansion seen in the second quarter.

“We expect EBIT margins to improve by 80 bps QoQ, led by easing supply-side pressures weaker rupee partially offset by lower utilization due to higher furloughs,” Sharekhan said in its report.

Revenue traction in some of the key sectors such as banking, financial services and insurance (BFSI), consumer and retail, communications will be closely tracked to gauge the potential impact of the economic slowdown on businesses.


had reported strong double-digit growth across these sectors in the last quarter.

From a geography perspective, the Street will watch for growth in North America, the UK and Europe.

TCS saw a double-digit growth in both North America and the UK, while the growth was in single digits for Europe, and the company had highlighted heightened uncertainty in this market when compared to North America and UK.

While Infosys is seen retaining growth guidance for FY23, its outlook for 2023 for growth, the nature of deals, and attrition trends will be closely watched out for in the backdrop of an uncertain global environment.

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