As India Inc’s earnings season has begun with the results of India’s largest IT services company TCS unveiling on Monday, another IT giant Infosys is set to release its financial results on Wednesday. Apart from the quarterly results of March 2022, the company will also provide an indication for the coming period. These are key parameters that investors should see in the results:
According to a report by YES Securities, the company is expected to post a 26.3 year-over-year (yoy) revenue increase to Rs 33,219 crore in the quarter ended March 2022. Growth is expected to be broad across all industries .
Growth in PAT or Net Profit
Analysts expect an after-tax profit (PAT) of Rs 6,105 crore in the fourth quarter of fiscal year 2021-2022, up 20.3 percent year on year.
The company will announce its revenue forecasts for the coming quarter and the coming year. Infosys’ FY23 revenue and margin guidance would be the key to watch out for. At the previous announcement of its third quarter 22 financial statements, it had raised its revenue forecast to 19.5-20 percent for the full fiscal year 2021-22. It had previously estimated growth at 16.5-17.5 percent in constant currency.
The company’s big deal is also a major focus. Big deal wins accelerated with a total contract value (TCV) of USD 2.53 billion in the December 2022 quarter. “USD Factorized Sales/EPS CAGR of 14/18% over FY22-24E, led by market share gains in major deals with momentum in the digital segment, improved relative performance in operations, strong global execution framework, strong stratification in partner ecosystem and execution track record and balance sheet strength,” HDFC Securities said in its report.
The company had posted a healthy operating margin of 23.5 percent for the December 2021 quarter, with a free cash flow conversion of 92.6 percent. It was down 1.9 percent year-over-year and 0.1 percent quarter-over-quarter.
For the information sector as a whole, ICICI Securities said in its report, “Indian IT company growth is expected to moderate in Q4FY22, as it has historically been in the fourth quarter. Margins are expected to take a hit as a result of continued higher personnel costs. The demand environment remained strong, led by continued deal momentum led by sectors such as BFSI, insurance, etc. There should be some headwinds in currency exchange rates during the quarter, which will weigh on dollar revenues to some extent in the fourth quarter.
In the December 2021 quarter, Infosys recorded an 11.8 percent jump in consolidated net profit to Rs 5,809 crore from Rs 5,197 crore in the corresponding quarter last year. Revenue from operations rose 22.9 percent yoy to Rs 31,867 crore in October-December 2021, compared to Rs 25,927 crore in the same period a year ago.
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