Infosys trades flat ahead of Q2FY24 results; here is what to expect from IT giant

Infosys Q2 preview: The earnings season has already kicked off with a mixed performance by IT services giant Tata Consultancy Services (TCS). TCS reported a weak set of revenues due to a slowdown in discretionary projects, especially in North America, and project ramp-downs. TCS reported revenue at $7.2 billion (-0.2 per cent QoQ) in 2QFY24, and up 0.1 per cent QoQ in constant currency (CC) terms, which was below the consensus estimates. For instance, Motilal Oswal Financial Services had pegged revenue growth in CC terms at 1.1 per cent on a sequential basis.

Besides, the company announced a Rs 17,000 crore share buyback and an interim dividend of Rs 9. The buyback price of Rs 4,150 is below Street expectations.

That said, let's take a look at how Infosys is expected to fare. The company is scheduled to announce its results later in the day.

Shares of the company were trading flat at Rs 1,499.80 on the BSE, up 0.41 per cent in the opening deals. 

Domestic brokerage Sharekhan expects Infosys to report revenue growth at 0.7 per cent in CC terms due to discretionary spend rationalisation, with nearly 20 basis points (bps) cross-currency headwinds to result in reported US dollar revenue growth of 0.5 per cent q-o-q. EBIT margins are likely to decline by nearly 20 bps QoQ, impacted by higher travel and back-to-office costs.

The brokerage expects revenue in rupee terms to come in at Rs 38,322 crore, up 4.9 per cent YoY and 1 per cent QoQ. Operating profit margin is expected to slip 60 basis points (bps) YoY and 13 bps QoQ to 23.8 per cent. Net profit is seen at Rs 6,160 crore, against Rs 6,021 crore in the corresponding quarter of the previous fiscal. This will be 2.3 per cent growth YoY and 3.6 per cent on a QoQ basis.

Zee Business Research expects Infosys to report revenue of Rs 38,400 crore, up 1.2 per cent QoQ. Revenue in US dollar terms is expected to come in at 465.2 crore, up 0.8 per cent QoQ. EBIT margin is seen at Rs 8,050 crore, up 2 per cent QoQ, while EBIT margin is seen at 21 per cent against 20.8 per cent in the previous quarter. Profit after tax (PAT), or net profit is expected to rise 6 per cent to Rs 6,300 crore against Rs 5,945 crore in the previous quarter.

Further, the company is expected to maintain its revenue guidance of 1 per cent-3.5 per cent. Key monitorables include FY24 guidance update, vertical outlook, deal TCVs and pipeline, margin levers, attrition, and pricing.