Wipro, TCS Q4 results out; will Infosys surprise stock market on Thursday, April 17?

Infosys Q4 results: With Wipro Ltd and Tata Consultancy Services Ltd (TCS) announcing their quarterly results, all eyes are on the Salil Parekh-led Infosys, which would announce its Q4 results on Thursday, April 17 at 3.45 pm. 
The Bengaluru-based IT firm is seen reporting 15-18 per cent year-on-year (YoY) decline in net profit for the March quarter, despite reporting 10 growth in sales. On a sequential basis, analysts believe Infosys may lead revenue decline among tier-1 IT companies in constant currency (CC) terms, analysts said.

IDBI Capital expects Infosys to report 17.7 per cent YoY slump in net profit at Rs 6,560 crore despite 9.8 per cent jump in sales at Rs 41,632 crore. Ebit is seen rising 12.5 per cent YoY to Rs 8,574 crore. Margin is seen expanding 50 bps YoY to 20.60 per cent, but falling 74 basis points sequentially due to wage hike for junior employees. 

"We would watch for: ramp up of large deals; trend in discretionary spends; trends in Generative AI; margin outlook; and outlook on conversion of pipeline and project run offs hiring & utilization outlook and any tweak in FY25 guidance," IDBI Capital said.

Choice Broking sees Infosys revenue growing 10.5 per cent YoY despite seasonal softness. It sees EBIT margin contracting 10bps QoQ due to wage hikes & lack of topline growth in Q4. PAT is seen tanking 17.4 per cent to Rs 6,580 crore. 

The company's margins are anticipated to shrink due to wage hikes and visa-related expenses, though these pressures may be partially mitigated by cost optimisation measures and reduced third-party spending.

According to Kotak, spending on managed services is expected to remain more resilient compared to discretionary services. Since Infosys, similar to Wipro, has greater exposure to discretionary spending, it could be slightly more exposed in a soft demand environment.

Sharekhan has estimated Infosys' profit at Rs 6,772 crore, marking a 15 per cent decrease. It projects revenue to rise 10.6 per cent to Rs 41,933 crore. Meanwhile, Nuvama expects revenue to decline 1 per cent quarter-on-quarter (QoQ) in CC terms and 1.5 per cent QoQ in dollar terms, which aligns with the company’s guided range. EBIT margin is projected to contract by 100 basis points QoQ, mainly due to wage hikes.

Nuvama expects Infosys to announce a revenue growth guidance of 2–5 per cent in constant currency (CC) terms year-on-year (YoY) for FY26, with margin guidance likely to remain steady at 20–22 per cent. Overall, net profit is projected to decline 15.7 per cent to Rs 6,720 crore, despite an 11 per cent YoY increase in sales to Rs 42,096 crore. Dollar revenue is estimated at $4,867 million, reflecting a 1.5 per cent decline quarter-on-quarter (QoQ), but a 6.6 per cent rise on a YoY basis.

Foreign brokerage Nomura noted that market focus will be on management's commentary around client discretionary spending amid growing macroeconomic volatility in the US. It added that insights into cost takeout initiatives and performance of the BFSI vertical will be particularly important. Nomura also expects Infosys to guide for 2–5 per cent YoY revenue growth with an EBIT margin range of 20–22 per cent for FY26.

Wipro, TCS results
Earlier today, the Srini Pallia-led  IT company Wipro declared a 25.93 per cent year-on-year (YoY) increase in its consolidated net profit for the March 2024 quarter (Q4 FY25). The profit for the quarter stood at Rs 3,569.6 crore, up from Rs 2,834.6 crore in the same period last year (Q4 FY24).

Earlier this week, the largest IT exporter TCS reported a 1.68 per cent year-on-year (YoY) decline in net profit for the March quarter, with earnings at Rs 12,224 crore compared to Rs 12,434 crore in the corresponding quarter last year.