Infosys Q1 Preview: Net profit may jump 6% YoY; strong sequential revenue growth seen

economictimes.indiatimes.com:

IT services company Infosys Ltd is expected to post strong sequential revenue growth in the first quarter ended June 2024, driven mainly by ramp up of large deals. The company will announce its results on July 18.

Revenues for the first quarter are seen rising 2.5% quarter-on-quarter, according to an average estimate of four brokerages. Meanwhile, the same is likely to jump 2% year-on-year. The constant currency revenue growth is estimated to be up to 3% quarter-on-quarter.

Net profit for the April-June 2024 period is likely to increase 6% year-on-year, an average estimate of four brokerages showed.

Key monitorables to watch out include deal TCVs and pipeline, pricing scenario, attrition, and outlook on growth and margins.

In the preceding March quarter, Infosys posted a 30% year-on-year growth in its consolidated net profit at Rs 7,969 crore, while revenue stood at Rs 37,923 crore, up 1% year-on-year.

Here's what analysts expect from Infosys Q1

Kotak Equities

We forecast sequential revenue growth of 2.5%, led by ramp-up of multiple mega-deals, March 2024 quarter had a one-off impact of 100 bps on revenues from rescoping of engagement with a financial services client. This provides a low base and effectively a 1% kicker to June 2024 quarter growth numbers.

We expect a 80 bps quarter-on-quarter increase in EBIT margin on the back of the absence of a 100 bps one-off impact. At the same time, we expect normalization of ECL and post-sale client support provision leading to a headwind of 50 bps. Net accrual of