Infosys Q3 Profit Seen at Rs 3,151 Crore; Guidance Cut Likely

Infosys shares were choppy on Friday ahead of its quarterly earnings announcement at 12.30 p.m. This is the first time Infosys is reporting numbers during market hours. (Read full story here)

Brokers polled by NDTV expect Infosys to report a 3.15 per cent quarter-on-quarter rise in sales at Rs 13,760 crore, while net profit is expected to rise 1.8 per cent to Rs 3,151 crore. Infosys had reported a profit of Rs 3,096 crore on sales of Rs 13,342 crore in the September quarter.

Operating margins are likely to dip to 25.9 per cent as against 26.1 per cent in the previous quarter, analysts estimate.

US dollar sales are seen edging up just 1 per cent sequentially to $2223 million versus $2201 million in the previous quarter.

Infosys may also cut its fiscal year 2014-15 sales growth guidance from 7- 9 per cent to 6.5-8.5 per cent. This may lead to some volatility in stock prices, analysts say.

Infosys is not the only IT firm facing growth headwinds. Most IT companies are expected to report weak numbers for the December quarter because, (Read the full story)

1) Global currencies such as the pound, euro and Australian dollar, which contribute between 25-30 per cent to revenues of big IT firms, have depreciated by nearly 4-6 per cent sequentially in the third quarter. As a result, revenues from European operations could be flat to negative. Nomura expects overall US dollar revenue growth to come down by an average 150 basis points for India's top five IT companies in the December quarter.

2) The December quarter is seasonally weak because of holidays in the key markets of North America and Europe. This will further weigh on revenue growth in the current quarter.

Key things to track: Infosys' employee ulitization is likely to come down due to lower growth. The management's outlook about client budgets in 2015 will be keenly watched. Commentary on margins and deal signings will also be tracked closely. The new CEO's strategy on growth and checking high attrition will also be in focus, analysts say.

As of 09.50 a.m., Infosys shares traded 0.2 per cent lower at Rs 1,970 underperforming the BSE IT sub-index, which was up 0.7 per cent. (Track stock)