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After TCS, focus shifts to Infosys Q4 results; Here’s what to expect


After IT giant TCS, the focus has now shifted towards Infosys which is set to announce its financial performance on Tuesday. Peers TCS missed estimates in terms of bottom-line. With attention now being diverted to Infosys, investors will gauge FY23 revenue and margin guidance, outlook on pricing trends, and management commentary. Infosys is seen to report a stable quarter.

Last month, Infosys informed exchanges that its board will meet on 12 April and 13 April to recommend a final dividend for the current financial year (FY22).

What to expect from Q4FY22?

Manik Taneja and Dimel Francis, analysts at JM Financial said, “We are building in a 3% QoQ c/c revenue growth with ~40 bps cross-currency headwinds translating into a 2.6% QoQ USD revenue growth. Expect stable EBIT margins at 23.4% for 4QFY22.”

“We expect Infosys to guide for 12-14% YoY c/c revenue growth for FY23 (starting the year with a similar range as FY22) and implying a 1.8-2.5% CQGR through the course of the year,” the analysts mentioned above said. 

Further, they expect Infosys guidance of 21-23% EBIT margin band versus 22-24% earlier.

Further, the analysts at JM Financial said that expect investors to focus on (1) FY23 revenue guidance (we expect INFO to guide for a 12-14% YoY c/c revenue growth), (2) FY23 Margin band (we expect INFO to guide for 100 bps dilution in the margin band due to margin pressures from the resumption in travel) and (3) pricing trends and supply-side industry dynamics.

Moreover, JM Financial analysts expect Infosys revenue to rise by 25.1% yoy and 3.3% qoq to 32,907.9 crore, while net profit is seen at 5,883.8 crore up 15.9% yoy and 1.3% qoq. In dollar terms, revenue is estimated at $ 4,359 million rising by 20.6% yoy and 2.6% qoq. EBIT is forecasted at 7,705.8 crore higher by 19.7% yoy and 3% qoq.

Stock Outlook:

Infosys is one of the top picks of JM Financial analysts in this sector. They have given a Buy recommendation with a target price of 2,030 apiece.

On Monday, Infosys shares corrected ahead of their Q4 earnings. The shares settled at 1766.65 apiece on BSE down by 48.45 or 2.67%. The shares did open at an intraday high of 1818.95 apiece before pulling back and taking a downturn to even clock an intraday low of 1763 apiece.

So far in a year, Infosys shares have jumped by nearly 24% taking into consideration today’s closing price. The shares stood near 1,425 apiece on April 12 last year.

The shares of Infosys have touched a new 52-week high of 1,953.70 apiece on BSE earlier this year.

On Tuesday, Infosys shares will be in focus as investors will observe the company’s financial performance.

Previous Quarter:

In Q3FY22, Infosys posted a net profit of 5,809 crore higher than 5,197 crore in the same quarter last year. Further, its revenue stood at 31,867 crore rising compared to 25,927 crore in Q3FY21.

Infosys delivered strong Q3 performance with sequential growth of 7.0% in a seasonally weak quarter and year-on-year growth of 21.5% in constant currency. Growth remained broad-based and deal momentum robust, with digital transformation rapidly scaling across verticals and regions. Large deal wins accelerated with TCV of $2.53 billion in Q3. The operating margin for the quarter was healthy at 23.5%, with Free Cash Flow conversion at 92.7%, as per the audit report.

In this quarter, Salil Parekh, CEO, and MD upgraded the company’s revenue guidance to 19.5%-20.0% for FY22.

In the nine months ending period of FY22, the net profit and revenue rose to 16,425 crore and 89,365 crore compared to 14,275 crore and 74,161 crore witnessed in the same period last year.



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