Infosys is likely to report muted earnings in the quarter ended December due to seasonal challenges. While revenue growth is expected to remain modest on a sequential basis, net profit is likely to see a slight increase. Analysts also anticipate a potential upward revision in the company’s revenue guidance for fiscal 2025.
According to average estimates of five brokerages, revenue is expected to grow by 0.6% quarter-on-quarter to Rs 41,222.3 crore, compared to Rs 40,986 crore in the previous quarter. The company’s consolidated net profit is forecast to rise by 3.5% sequentially to Rs 6,736.4 crore, from Rs 6,506 crore in the prior quarter.
The IT major’s revenue growth in Q3 is expected to remain muted due to seasonal weakness of the quarter marked by high furloughs.
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However, ramp-up of large deals is expected to offset some of the furlough-related drag. “Continued demand improvement in financial services and ramp-up of large deals will aid growth,” Nomura said.
Further, analysts suggest that currency tailwinds and steady deal momentum may support a marginal improvement in the bottom line despite the seasonal challenges.
Kotak Institutional Equities predicts a 0.7% sequential revenue growth attributing it to sales of third-party items, with no significant headwinds or tailwinds expected during the quarter.
Nuvama anticipates similar growth at 0.8% in constant currency (CC) terms, though it expects flat performance in US dollar terms due to currency fluctuations. Elara Capital, however, projects a slight dip of 0.3% in CC revenue and a 1% drop in dollar-denominated revenue.
Meanwhile, JM Financial said that “lower transition costs associated with large deals could benefit margin, though lower growth will limit the extent of expansion”.
The Ebit margin is expected to remain stable at around 21.2% for Q3 FY25, according to Kotak Institutional Equities, while Nuvama projects a marginal improvement of 30 basis points, driven by Project Maximus initiatives. Meanwhile, Elara Capital anticipates a slight drop in margins by 30 basis points due to negative operating leverage.
HDFC Institutional Research also predicts that the company will maintain its FY25 Ebit margin guidance of 20–22%, supported by stable cost structures. Analysts point out that the absence of wage hike impacts from the previous quarter will likely offer some respite,
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