Infosys is set to report its earnings for the April-June quarter post-market hours today. Analysts and investors will monitor the quarterly report card by the country's second largest IT company closely. All eyes will be on the revenue guidance, performance of the digital and for banking, financial services and insurance (BFSI) units, among others. Investors will also look out for the IT major's commentary on movement of the rupee against the US dollar. Prolonged weakness in the rupee is likely to impact Infosys profitability in the June quarter, say analysts. Brokerages expect Infosys to post a growth in revenue.
HDFC Securities estimates Infosys to report a revenue of $2,835 million, an increase of 1.1 per cent and 7 per cent on a sequential (quarter-on-quarter) and annual (year-on-year) basis respectively. It estimates the company's rupee revenue at Rs 18,996 crore, a growth of 5.1 per cent and 11.2 per cent on a QoQ and YoY basis respectively.
IDBI Capital forecasts a revenue growth of 5.6 per cent and 11.8 per cent on a quarter-on-quarter (QoQ) and year-on-year (YoY) basis respectively. The brokerage expects the EBIT margins to decline by 90 basis points (bps) QoQ impacted by salary increase and visa costs. The impact, it says, would be partly offset by rupee depreciation.
Here are five things to expect from Infosys' June quarter results:
1. FY19 growth outlook: Both HDFC Securities and IDBI Capital expect Infosys' revenue guidance in constant currency terms to be unchanged at 6-8 per cent.
2. EBIT margin guidance: IDBI Capital expects the company to maintain its EBIT margin guidance of 22-24 per cent. HDFC Securities expects an upside risk of 50 basis points (0.5 per cent).
3. Performance of BFSI, retail, digital units
4. Deal wins: IDBI Capital will watch out for the company's commentary on calendar year 2018 client budget, especially large deals, deal wins and pipeline/pricing environment.
5. Mergers & acquisitions: Investors should watch out for any commentary on mergers and acquisitions and capital allocation, say analysts.
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