On Thursday, July 18, the IT behemoth Infosys is scheduled to reveal its Q1 financial results. Based on a ramp-up in significant agreements signed during FY24, experts predict that Infosys would witness a turnaround in its sequential revenue increase to 2-3 percent on constant currency (CC). Management’s thoughts on any changes to the revenue growth forecast for FY25, however, remain to be seen.
Infosys’s revenue in the March 2024 quarter was Rs 37,923 crore, a decrease both sequentially and year over year.
StoxBox Head (Research) Manish Chowdhury stated for the June 2024 quarter that Infosys’ revenue growth is likely to rebound to 3% sequentially in CC terms due to the ramp-up of significant deals secured in FY24. “We anticipate modest margin expansion, driven by strong growth and operational efficiencies.”
A significant amount of TCV (total contract value) is predicted to be strong in Q1. The emphasis will be on converting income from major deals inked in previous quarters, he noted.
Chowdhury reported, “We are awaiting management’s commentary on any adjustments to FY25 revenue growth guidance, the discretionary spending environment, particularly in affected verticals, senior management attrition, and the conversion of mega deals into revenues.”
Infosys anticipates a 1-3 percent revenue increase in constant currency for fiscal year 2024-25
According to Motilal Oswal, Infosys‘ revenue growth is likely to rebound to 2.0% quarter-on-quarter (QoQ) CC, owing to the increase in significant agreements secured in FY24. Motilal Oswal anticipates a strong transaction TCV in Q1; nevertheless, deals should be weighted toward cost-cutting efforts.
Infosys’ operating margin is likely to rise by 30 basis points in the first quarter, owing to growth momentum and the lack of wage increases. Infosys’ operating margin is expected to be around 20.4%. According to Motilal Oswal, the company is expected to retain its FY25 growth estimate of 1-3% in constant currency.
Tata Consultancy Services (TCS) and HCL Tech reported earnings for the June 2024 quarter last week. Both companies outperformed expectations with their growth rates. Following this, the companies’ stock prices rose.
TCS, India’s largest IT services business, reported a 9% year-on-year increase in its consolidated net profit to Rs 12,040 crore for the first quarter of fiscal year 2024-25, which ended June 30. Its operating revenue climbed by 5.4% year on year to Rs 62,613 crore between April and June 2024. Analysts projected a profit of Rs 11,999 crore and a revenue of Rs 62,190 crore.
HCL Technologies net profit increased by 20.45% year on year to Rs 4,257 crore in the first quarter of fiscal year 2024-25. Its operating revenue increased by 6.69 percent to Rs 28,057 crore between April and June 2024, up from Rs 26,296 crore the previous year.
Infosys’ shares rose Rs 18.60, or 1.09 percent, to Rs 1,725.8 on the BSE on Tuesday. The stock market is closed on Wednesday in honor of ‘Muharram’.
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