Infosys Q1 Results Preview: It is likely to see a rebound in its sequential revenue growth to 2-3 per cent CC, on the back of a ramp-up in large deals won during FY24.
IT major Infosys is set to release its Q1 financial results on Thursday, July 18. According to analysts, Infosys is likely to see a rebound in its sequential revenue growth to 2-3 per cent on constant currency (CC), on the back of a ramp-up in large deals won during FY24. However, management commentary on any tweaks to FY25 revenue growth guidance is to be seen.
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In the previous March 2024 quarter, Infosys’s revenue fell both on year-on-year and sequential bases to Rs 37,923 crore.
For the June 2024 quarter, StoxBox Head (Research) Manish Chowdhury said, “Infosys’ revenue growth is expected to rebound to 3 per cent sequentially in CC terms due to the ramp-up of large deals won in FY24. We expect modest margin expansion led by strong growth and operational efficiencies.”
A large deal of TCV (total contract value) is expected to be robust in Q1. The focus will be translating revenues from large deals signed in earlier quarters into revenues, he added.
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“We await management commentary on any tweaks to FY25 revenue growth guidance and the discretionary spending environment, especially in impacted verticals, senior management attrition, and translating mega deals into revenues,” Chowdhury said.
Infosys expects a revenue growth of 1-3 per cent in constant currency for financial year 2024-25.
According to Motilal Oswal, Infosys is expected to see a rebound in revenue growth to 2.0 per cent quarter-on-quarter (QoQ) CC, on account of the ramp-up of large deals won in FY24. Motilal Oswal expects the deal TCV to be robust in Q1; however, deals should be skewed towards the cost-takeout initiatives.
The operating margin for Infosys in Q1 is expected to increase by 30 basis points, supported by growth momentum and the absence of wage hikes. Infosys’ operating margin is likely to reach 20.4%. The company is also likely to maintain its growth guidance of 1-3% in constant currency for FY25, according to Motilal Oswal.
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Last week, IT majors Tata Consultancy Services (TCS) and HCL Tech declared their June 2024 quarter earnings. Both the companies posted growth better than expected. Following this, shares of the companies saw a jump.
TCS, India’s largest IT services company, reported a 9 per cent rise year-on-year in its consolidated net profit to Rs 12,040 crore for first quarter of the financial year 2024-25 ended June 30. Its revenue from operations during April-June 2024 increased 5.4 per cent year-on-year to Rs 62,613 crore. Analysts had expected a profit of Rs 11,999 crore and a revenue of Rs 62,190 crore.
HCL Technologies posted a significant 20.45 per cent jump year-on-year in its net profit to Rs 4,257 crore for the first quarter of the financial year 2024-25. Its revenue from operations during April-June 2024 rose 6.69 per cent to Rs 28,057 crore, against Rs 26,296 crore in the year ago period.
Shares of Infosys on Tuesday jumped Rs 18.60 or 1.09 per cent to Rs 1,725.8 apiece on the BSE. The stock market is closed on Wednesday on account of ‘Muharram’.
