Infosys Set to Announce Q3 Results Amidst IT Sector Slowdown: Revenue and Margins Expected to Dip
Infosys, founded by Narayana Murthy, is gearing up to unveil its Q3 results on January 11, with anticipated challenges in revenue and margins reflecting the broader slowdown in the IT sector.
As the IT industry grapples with a slowdown in financial growth among major players, Infosys is likely to report a decline in both earnings and revenue for the quarter ending on December 31, 2023. The prevailing hiring freeze, job cuts, and a drop in demand, coupled with a heightened reliance on artificial intelligence, contribute to the subdued outlook for the sector.
Despite the challenges, Infosys may find support in factors such as improved utilization, reduced sub-contracting expenses, and the depreciation of the Indian Rupee. Analysts project a 1.16 percent drop in revenue for Q3, with expectations of the company's revenue in USD terms decreasing to $4,642 million from $4,718 million in Q2FY24. In terms of INR, revenue is predicted to fall by 0.86% to ₹38,657 crore from ₹38,994 crore.
The net profit for Infosys in December 2023 is anticipated to be ₹6,172 crore, marking a 0.64 percent decline compared to the previous quarter when the company reported a profit of ₹6,212 crore.
Key Points to Watch Out for in Infosys Q3 Results:
- EBIT Margins: A decline is expected, likely falling in the 72-100 basis points range.
- Growth Guidance: The firm's growth guidance is anticipated to drop to 1-2.5 percent in the second quarter.
- Total Contract Value (TCV): After recording the highest TCV at $7.7 billion in Q2, the absence of major deal signings in Q3 may lead to a slight drop.
- Management Commentary: Insights into the impact of salary hikes and performance bonuses on TCV, margins, pricing scenarios, and more will be closely scrutinized.
As Infosys navigates the challenges in the IT sector, stakeholders await the Q3 results for a comprehensive understanding of the company's performance and its strategies to overcome the prevailing industry headwinds.
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