Infosys Q3 Results Preview: Net profit likely to increase over 9% to Rs 6,580 crore, no change seen in revenue guidance

Infosys -- India's second largest IT firm -- is all set to report its financial results for the October-December period on January 12, after its rival Tata Consultancy Services (TCS) reported a mixed set of quarterly earnings.

According to Zee Business research, Infosys is expected to report a net profit of Rs 6,580 crore for the three-month period, which translates to an increase of 9.3 per cent compared with the previous quarter. 

The IT major is estimated to report revenue growth of 3.8 per cent on a sequential basis to Rs 37,920 crore for the quarter ended December 2022. Revenue in dollars is estimated to increase to $4614 million for the quarter, as against $4555 million for the previous three months -- a sequential rise of 1.3 per cent, according to Zee Business research. 

Revenue in constant currency terms is likely to improve by 1.5 per cent compared with the July-September period.

Its earnings before interest and taxes (EBIT) -- a measure of a firm's operating income -- is pegged at Rs 8,200 crore, up 4.2 per cent on a quarter-on-quarter basis.

Infosys earnings come at a time when IT companies are reeling under margin pressure on account of higher employee spends due to sticky attrition rates, despite demand across sectors and weakness in the rupee. Weakness in the rupee typically boosts the profitability of export-oriented businesses such as IT.    

Infosys is estimated to maintain its growth guidance at 15-16 per cent in constant currency terms as well as the EBIT margin guidance at 21-23 per cent, according to Zee Business research.

According to Zee Business research, the IT services company's margin is likely to improve by 10 basis points to 21.6 per cent in the December quarter.

Analysts will closely look out for the management's outlook for 2023, its deal pipeline, and its take on supply-side pressure, pricing and attrition. They expect the impact of furloughs and an absence of large deals on growth. 

Infosys shares gave investors a return of 6.8 per cent in the quarter ended December, a period in which the Sensex benchmark climbed up 5.9 per cent.  

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