On Thursday, July 18, Infosys, the second-largest information technology firm in India, is scheduled to release its financial results for the first quarter of its fiscal year 2024–2025, which runs from April to June. According to experts, Infosys is predicted to top the tier 1 Indian IT market with the greatest growth, driven by the ramp-up of many mega-deals and a low base that would effectively provide a 1% boost to growth in the June 2024 quarter.
Brokerages predict that Infosys' revenue would rise between Rs 38,800 crore and Rs 39,138 crore, or two to three percent, YoY. Similarly, revenues might increase by 2-4 percent in a consecutive fashion. In Q4FY24 and Q1FY24, the firm reported revenues of Rs 37,923 crore and Rs 37,933 crore, respectively.
Additionally, the IT giant can record a net profit for the June quarter between Rs 6,200 crore and Rs 6,551 crore, up from Rs 5,945 crore in Q1FY24. This indicates a YoY growth for Q1FY25 of 4–10 percent. Quarterly profits might increase by 3 to 9 percent. For the March quarter of FY24, the business declared profit after tax (PAT) of Rs 5,998 crore.
Important metrics to track: The market will be monitoring any changes to the FY25 revenue growth forecast, the inSemi acquisition, enterprise discretionary expenditure, and the decision to back out of the Liberty purchase.
Also, the following is what leading brokerages anticipate from Infosys' Q1 results:
Kotak Institutional Equities: Infosys is expected to see a 2.5 percent sequential revenue gain, according to analysts. Earnings Before Interest and Taxes (EBIT) margin is expected to improve by 80 basis points (bps) on a quarterly basis.
In addition, they anticipated a $3 billion Total Contract Value (TCV) for the massive agreement. The conversion of major transactions into revenues that were inked in the previous quarters will be the main emphasis. According to the brokerage, Infosys will stick to its projected revenue increase of 1-3 percent and EBIT margin of 20–22 percent.
Investors should keep an eye on the conversion of megadeals into revenues, the deal pipeline, the BFSI forecast, the climate for discretionary expenditure in the affected verticals, and the turnover of senior management in the interim.
Nomura: According to the brokerage, Infosys would experience 3.0 percent QoQ Constant Currency (CC) growth due to the ramp-up of major agreements, the absence of a one-time BFSI client contract restructuring impact of 100bp, and the company's strong seasonality.
"We anticipate Infosys to stick to its 1-3% revenue growth target for CC in FY25F. With the non-occurrence of a one-time BFSI client contract restructuring effect of 100 bps, we anticipate that Ebit margins will increase by 80 bps QoQ. The analysts noted in a report, "An extra tailwind QoQ will be the absence of visa cost."
Researchers at Nuvama: They also predict revenue growth of more than 2.2% QoQ in dollar terms and more than 2.5% QoQ in CC terms. Due to operating leverage and unusual events in Q4, the ebit margin is expected to increase by 70 basis points. Additionally, they say that Infosys would stick to its revenue growth forecast and maintain margins between 20 and 22 percent for FY25.
Motilal Oswal: Because benefits from its cost-benefit initiatives are offset by visa and other seasonal charges with no salary raises, analysts at MOSL predict Infosys to record relatively robust 2.0 percent QoQ CC revenue growth with a margin that improves modestly by 30 bps.
ICICI Securities: They see momentum in the BFSI vertical, liberty deal ramp up, and hi-tech industries. They factor in a 2% quarterly rise in CC revenue. Additionally, they project 3.5% YoY dollar growth for FY25, with in-semi accounting for 100% of inorganic revenue.
