As India Inc’s earnings season begins with India’s largest IT services firm TCS Another IT chief declaring his result on Monday Infosys is going to announce its financial results on Wednesday. The company will also provide its guidance for the period ahead in addition to the March 2022 quarter results. Here are the important parameters for investors to look for in results:
increase in revenue
According to a report by Yes Securities, the company expects a 26.3 year-on-year (YoY) jump in revenue to Rs 33,219 crore for the quarter ended March 2022. Growth is expected to be broad based across all sectors of the industry.
Increase in PAT or Net Profit
Analysts expect profit after tax (PAT) of Rs 6,105 crore in the fourth quarter of FY 2021-22, a jump of 20.3 per cent year-on-year.
revenue guidance
The company is going to give its revenue guidance for the coming quarter and year. Infosys’ FY23 revenue and margin guidance will be key to watch. During the last Q3FY22 financial statement announcement, it had raised its revenue guidance for the full fiscal year 2021-22 to 19.5-20 per cent. Earlier it had forecast a growth of 16.5-17.5 per cent in constant currency.
deal pipeline
The company’s big deal is also an important watch. Its big deal wins accelerated in the December 2022 quarter with a total contract value (TCV) of USD 2.53 billion. “Market-share gains in large deals with momentum in the digital segment, improving relative performance in operations, strong global execution framework, partner ecosystem and strong levels of execution factored USD at 14/18% in FY 2012-24E Revenue / EPS CAGR. track record and balance sheet strength,” HDFC Securities said in its report.
operating margin
The company had posted a healthy operating margin of 23.5 per cent for the December 2021 quarter, with free cash flow conversion at 92.6 per cent. It had declined 1.9 per cent year-on-year and 0.1 per cent quarter-on-quarter.
As for the information sector as a whole, ICICI Securities in its report said, “Growth of Indian IT companies is expected to moderate in Q4FY22 as seen historically in Q4. Margins are expected to be impacted due to rising employee expenses. The demand environment remained strong on sustained transaction momentum led by sectors such as BFSI, Insurance etc. There will be some cross-currency headwinds during the quarter, which will depress dollar revenue, to some extent, in the fourth quarter.
In the December 2021 quarter, Infosys reported a 11.8 per cent jump in consolidated net profit at Rs 5,809 crore from Rs 5,197 crore in the same quarter last year. Its revenue from operations grew 22.9 per cent to Rs 31,867 crore during October-December 2021 as against Rs 25,927 crore in the year-ago period.
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