Infosys Ltd., which is set to announce its earnings for the second quarter of the current financial year on Thursday, is expected to see a growth in revenue, profits and margin.
The IT services major's consolidated net profit may rise 7% sequentially to Rs 6,815 crore in the quarter ended September, according to a consensus of analysts' estimates tracked by Bloomberg.
Infosys Q2 FY25 Earnings Estimates (Consolidated, QoQ)
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Revenue may rise 3.5% to Rs 40,707 crore.
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Profit may rise 7% to Rs 6,815 crore.
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EBIT margin may expand 30 basis points to 21.4%.
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EBIT may rise 5.2% to Rs 8,726 crore.
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Morgan Stanley expects Infosys to lead revenue growth by reporting organic constant currency sequential revenue growth of 2.8%. Bank of America expects this kind of revenue growth, including inorganic growth.
Large deal ramp-up and hiring in the second quarter should be margin headwinds. However, subcontractor optimisation and the positive impact of value-based selling should be able to negate the headwinds, according to JM Financial.
Motilal Oswal sees the company's operating margin inch down 80 basis points due to reversal of one-offs, large deal investments and decline in utilisation.
In terms of guidance, BofA, Morgan Stanley and Motilal Oswal expect Infosys to upgrade its full-year guidance by 50 basis points, while Ambit Capital expects it to maintain it.
Infosys has guided for revenue growth of 3–4% for the fiscal. The company raised its revenue forecast, citing significant large deals during the April–June period.
On demand commentary amid a cautious environment, ICICI Securities underscores that cost efficiency focus and deal consolidation will continue. Traction in financial services is expected to continue from the first quarter; higher traction in hi-tech and recovery in communication is also expected, it adds.
The company secured 34 large deals in the first quarter, its highest ever, with a total contract value of $4.1 billion, 57.6% of which were net new. Ahead of Q2 results, ICICI Securities notes that deal wins have been flat QoQ, slightly on the lower side.
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