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Infosys Q4 Preview: Can 2nd largest IT player beat TCS tomorrow? – Economic Times

NEW DELHI: India’s second largest IT company Infosys, which will announce its quarterly results on Wednesday, is likely likely to beat TCS, at least in terms of year-on-year March quarter profit and sales growth. Analysts are expecting Infosys to guide for double-digit revenue growth for FY23 while expecting the IT major to retain its Ebit margin guidance in the 22-24 per cent band.

TCS had on Monday reported a 7.4 per cent year-on-year rise in consolidated net profit at Rs 9,926 crore compared with Rs 9,246 crore in the same quarter last year. Revenues for the Tata Group firm was up 15.75 per cent YoY at Rs 50,591 crore.

Kotak Institutional Equities expects Infosys to report a 13.4 per cent YoY (down 0.9 per cent QoQ) rise in net profit at Rs 5,754.40 crore compared with Rs 5,076 crore in the year-ago quarter. Sales are seen rising 23.7 per cent YoY (up 2.1 per cent QoQ) to Rs 32,544.10 crore from Rs 26,311 crore in the year-ago quarter. The brokerage sees sequential revenue growth rate of 2 per cent in constant currency terms driven by continued strength in discretionary spending by clients. The brokerage sees Ebit margins falling 70 bps sequentially and 170 bps YoY.

“We expect modest growth guidance of 11-13 per cent that implies 1.5-2.5 per cent revenue compounded quarterly growth rate for four quarters of FY2023. We believe that the company will retain an EBIT margin guidance band of 22-24 per cent,” Kotak said while expecting deal wins to be muted at $2.5-3 billion.

Emkay Global sees Infosys’s profit growing 18.4 per cent to Rs 6,010 crore while sales rising 23.9 per cent YoY to Rs 32,610 crore.

“We expect 1.9 per cent sequential dollar revenue growth in Q4FY22 after factoring in 30 bps cross-currency headwinds. The EBIT margin is expected to remain flat in Q4FY22,” it said.

Emkay sees Infosys guiding for 12-15 per cent constant currency (CC) YoY revenue growth and 22-24 per cent EBIT margin. Investors would be looking forward to updates on client conversations – impact from high energy prices, inflation and potential economic slowdown.

YES Securities sees the company’s profit rising 20.3 per cent YoY to Rs 6,105 crore and sales 26.2 per cent to Rs 33,219 crore. Growth, it said, will be broad-based across industry verticals with almost flat sequential margins.

Management commentary on 2022 IT budget, steps it is taking to manage supply-side challenges and available levers to defend margins and demand environment in BFSI, manufacturing, retail, and communications segments, would be the key things to watch out for, analysts said.