Information technology firm Infosys is slated to release its March quarter and year-end earnings report on April 18. The country’s second-largest software exporter is expected to post muted numbers in the fourth quarter ending March 31, 2024, amid global headwinds and tight client spending, leading to slower growth.

According to market analysts, the Bengaluru-based IT services company is expected to post lower single-digit growth in its top and bottom line in Q4 FY24, as compared to the same quarter in previous year.

Infosys is expected to report revenue in the range of ₹38,945 crore to ₹38,432 crore, implying a year-on-year (YoY) growth of 2-4%. The net profit is projected to rise in the range of -0.4 to 5% YoY, ₹6,102 crore to ₹6,442 crore in Q4 FY24.  

Domestic brokerage ICICI Securities expects Infosys revenue to grow 2.2% YoY and de-grow 1.4% QoQ to ₹38,271.2 crore. Adjusted net profit is seen falling 2.3% QoQ and 2.7% YoY to ₹5,964.5 crore. The EBIT is projected to drop 2.4% QoQ and 1.4% YoY to ₹7,770.1 crore.  

“We expect EBIT margin to contract marginally by 20 bps QoQ due to continued wage hike and slow growth,” says ICICI Securities in its report.

“We expect some traction in communication (ramp up from liberty deal), BFSI (from deals announced in Q4). We expect 2% YoY USD growth, landing in the upper end of the guided range of 1.5-2% for FY25E. We build in USD 4.6mn revenue from inSemi acquisition for Q4E,” it added.

The brokerage in its report says that management commentary on panning out of Liberty deal; FY25 revenue growth guidance; inSemi acquisition, and enterprise discretionary spending will be keenly watched.  

Meanwhile, JM Financial in its earnings preview report says that visa cost, wage hike, reversal of 60 basis points one-off expense due to McCamish cyber incident will impact Infosys Q4 earnings. “We are building in -0.9% QoQ c/c revenue growth with 20 bps cross currency tailwind translating into -0.7% QoQ USD revenue growth.”

The agency expects limited contribution from mega deals in Q4, saying that, “we have not built meaningful contribution from InSemi acquisition.”

In Q3 FY24, Infosys reported 0.4% QoQ decline in revenue at ₹38,821 crore, while its net profit stood at ₹6,106 crore, registering a de-growth of 1.7% QoQ. The company’s operating profit was at ₹7,961 crore, down 3.8% QoQ, while its operating margins declined 100 bps to 20.5%, which was largely on account of higher operating expenses and a wage hike during the quarter.

Last Friday, IT bellwether Tata Consultancies Services (TCS) kicked off earnings season by posting a consolidated net profit of ₹12,434 crore in the January-March quarter 2023-24, up 9% from ₹11,392 crore a year ago. The company's revenue came in at ₹61,327 crore, a marginal 3.5% year-on-year growth (YoY). The company's operating margin for the quarter surged 26%, with a YoY expansion of 150 bps, while the net margin saw a 20.3% expansion, with a YoY expansion of 100 bps. It also announced the final dividend per share at ₹28 for the fourth quarter of FY24.

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