Infosys shares slip ahead of Q1 FY24 results: Here are brokerage expectations
IT major Infosys has been the best performer on the blue-chip index in the last one month, but analysts are not keeping much hopes with June quarter results.
- Jul 20, 2023,
- Updated Jul 20, 2023 11:43 AM IST
Shares of Infosys dropped more than 2 per cent during the early trading session on Thursday ahead of the June 2023 quarter results (Q1 FY24). The stock saw some profit booking after a 17 per cent rise in a month ahead of quarterly earnings for Q1 FY24. Shares of Infosys tumbled over 2 per cent to 1442.50 on Thursday as its total market capitalization slipped below Rs 6 lakh crore mark. However, the trading, volumes remained thin as traders looked at the earnings for the April-June 2023 period. The scrip had settled at Rs 1,474.35 on Wednesday. Infosys, the second largest software exporter of the country, is likely to disappoint in its earnings. The IT major has been the best performer on the blue-chip index in the last one month, but analysts are not keeping much hope with June quarter results, given delayed decision-making by clients. ICICIDirect expects Infosys to guide for mid to high single digit revenue growth in constant currency (CC) terms. "We also expect margins of the company to improve in FY24 as easing of supply side challenges, declining attrition, lower subcontractor cost and other cost optimization actions will continue to aid in margin improvement," it added. The brokerages believe that management commentary for business outlook and deal win, along with attrition rate will be the key. They are expecting the company to report a revenue around Rs 37,000-38,000 crore, flat on a quarter-on-quarter (QoQ) basis, but up in higher single digits on a year-on-year (YoY) basis. EBITDA margins are likely to contract and profit-after-tax (PAT) is seen flat QoQ. Axis Securities sees Infosys' revenue at 37,742 crore, up 10 per cent YoY and flat sequentially. It sees EBITDA at Rs 7.790 crore, falling QoQ but rising 13 per cent YoY with EBITDA margins contracting at 20.6 per cent. PAT its seen degrown sequentially to Rs 5,998 crore, but up 12 per cent YoY. "We expect revenue to remain flat on the backdrop of delayed decision making, Margins likely to contract because of wage hike partially offset by reduced subcon cost Key monitor cables are BFSI impact after the banking crisis and vertical commentary going ahead," said the brokerage firm. YES Securities expects Infosys to report a revenue at Rs 37,523.3 crore, up 9 per cent YoY but flat sequentially. EBITDA is seen at Rs 8,934.5 crore with a PAT at Rs 6,109.5 crore, rising 14 per cent YoY and flat QoQ. "Growth to be muted in the quarter due to ramp down by select clients. Commentary on outlook on attrition; deal environment and FY24 revenue and margin guidance would be key to watch out for," it said. HDFC Securities sees revenues at Rs 37,699 crore, rising 9 per cent YoY and flat sequentially. EBITDA is seen at Rs 7,891 crore, rising 15 per cent YoY with an EBITDA margin contracting to 21.2 per cent. Adjusted PAT is seen at Rs 6,271 crore, surging 17 per cent YoY but flat sequentially. Phillip Capital sees profit jumping 18.6 per cent YoY to Rs 6,357.70 crore from Rs 5,360 crore YoY and revenue rising 10.5 per cent YoY to Rs 38,095 crore from Rs 34,470 crore. Dollar revenue is seen rising 1 per cent sequentially and 3.5 per cent YoY. Ebit margin is seen at 21 per cent, flat QoQ but up 100 bps YoY.
Shares of Infosys dropped more than 2 per cent during the early trading session on Thursday ahead of the June 2023 quarter results (Q1 FY24). The stock saw some profit booking after a 17 per cent rise in a month ahead of quarterly earnings for Q1 FY24. Shares of Infosys tumbled over 2 per cent to 1442.50 on Thursday as its total market capitalization slipped below Rs 6 lakh crore mark. However, the trading, volumes remained thin as traders looked at the earnings for the April-June 2023 period. The scrip had settled at Rs 1,474.35 on Wednesday. Infosys, the second largest software exporter of the country, is likely to disappoint in its earnings. The IT major has been the best performer on the blue-chip index in the last one month, but analysts are not keeping much hope with June quarter results, given delayed decision-making by clients. ICICIDirect expects Infosys to guide for mid to high single digit revenue growth in constant currency (CC) terms. "We also expect margins of the company to improve in FY24 as easing of supply side challenges, declining attrition, lower subcontractor cost and other cost optimization actions will continue to aid in margin improvement," it added. The brokerages believe that management commentary for business outlook and deal win, along with attrition rate will be the key. They are expecting the company to report a revenue around Rs 37,000-38,000 crore, flat on a quarter-on-quarter (QoQ) basis, but up in higher single digits on a year-on-year (YoY) basis. EBITDA margins are likely to contract and profit-after-tax (PAT) is seen flat QoQ. Axis Securities sees Infosys' revenue at 37,742 crore, up 10 per cent YoY and flat sequentially. It sees EBITDA at Rs 7.790 crore, falling QoQ but rising 13 per cent YoY with EBITDA margins contracting at 20.6 per cent. PAT its seen degrown sequentially to Rs 5,998 crore, but up 12 per cent YoY. "We expect revenue to remain flat on the backdrop of delayed decision making, Margins likely to contract because of wage hike partially offset by reduced subcon cost Key monitor cables are BFSI impact after the banking crisis and vertical commentary going ahead," said the brokerage firm. YES Securities expects Infosys to report a revenue at Rs 37,523.3 crore, up 9 per cent YoY but flat sequentially. EBITDA is seen at Rs 8,934.5 crore with a PAT at Rs 6,109.5 crore, rising 14 per cent YoY and flat QoQ. "Growth to be muted in the quarter due to ramp down by select clients. Commentary on outlook on attrition; deal environment and FY24 revenue and margin guidance would be key to watch out for," it said. HDFC Securities sees revenues at Rs 37,699 crore, rising 9 per cent YoY and flat sequentially. EBITDA is seen at Rs 7,891 crore, rising 15 per cent YoY with an EBITDA margin contracting to 21.2 per cent. Adjusted PAT is seen at Rs 6,271 crore, surging 17 per cent YoY but flat sequentially. Phillip Capital sees profit jumping 18.6 per cent YoY to Rs 6,357.70 crore from Rs 5,360 crore YoY and revenue rising 10.5 per cent YoY to Rs 38,095 crore from Rs 34,470 crore. Dollar revenue is seen rising 1 per cent sequentially and 3.5 per cent YoY. Ebit margin is seen at 21 per cent, flat QoQ but up 100 bps YoY.