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Informist, Wednesday, Apr. 16, 2025

 

By Anjana Therese Antony

 

MUMBAI - Infosys Ltd. is widely expected to report muted revenue growth sequentially and a decline in its bottom line in the March quarter, similar to that of its industry peer Tata Consultancy Services Ltd. This could be because of the slow deal wins in recent quarters, furloughs in non-US geographies, and weak seasonality, various broking firms said. 

 

While the Bengaluru-based company is likely to retain its 20-22% operating margin guidance for 2025-26 (Apr-Mar), revenue growth guidance estimates are conservative due to the risks associated with the geopolitical uncertainty. Key verticals such as manufacturing and retail may encounter challenges in the mid-term due to tariffs negatively impacting top line growth, Choice Equity Broking said in its earnings preview report.

 

India's second-largest information technology company in terms of market capitalisation is expected to post a 2% sequential fall in its consolidated net profit to INR 66.67 billion, according to the average of estimates from 19 broking firms. HSBC Global Research has the highest bottom line estimate of INR 69.45 billion and Antique Stock Broking has the lowest of INR 64.81 billion. 

 

Consolidated revenue is expected to rise 0.5% from the previous quarter to INR 419.68 billion, as per the average of estimates. HSBC has the maximum top line estimate of INR 423.68 billion, while Nirmal Bang Institutional Equities has the least of INR 413.54 billion. 

 

Compared to the year-ago period, the bottom line is likely to fall over 16%, while the top line is seen rising nearly 11%. In the December quarter, the IT company had reported a higher-than-expected bottom line and top line of INR 68.06 billion and INR 417.64 billion, respectively.

 

Infosys is scheduled to release its quarterly results Thursday and the post-earnings press conference is at 1630 IST and the conference call with analysts is at 1730 IST. Market participants will closely watch for the management's comments on FY26 outlook, impact of tariffs on US operations, deal wins, trends in client budgets, and hiring. 

 

GUIDANCE
Broking firms have given different estimates for revenue guidance in constant currency terms for FY26. Some anticipate a more narrow guidance, while a few others expect the top line growth to be similar to what it had guided for FY25. Elara Securities expects Infosys to guide for 1-3% revenue growth for FY26, slightly lower than the 4.5-5.0% it had guided for FY25 during the December quarter results. Kotak Institutional Equities expected the company to guide for 1-4% revenue growth in constant currency terms, which implies a 0.5-1.7% compound quarterly growth rate during the financial year. Nuvama Institutional Equities anticipate the revenue guidance to be 2-5%. 

 

At least five broking firms expect Infosys to retain its 20-22?rnings before interest and tax margin for FY26. If so, this will be the ninth consecutive time the company would be retaining this view on the metric. In Oct-Dec, EBIT margin had expanded by 20 basis points sequentially to 21.3%. 

 

Most broking firms believe that the margin figure would decline on quarter in Jan-Mar due to wage hikes, visa costs, and muted revenue growth, most broking firms said. Elara Securities and ICICI Securities expect the margin to fall 50 bps sequentially, Kotak sees a 60-bps decline, and Nuvama Institutional Equities projects a fall of 100 bps. However, there are a few, such as HSBC, who believe that the figure would be unchanged as the above-mentioned headwinds are likely to be offset by cross-currency benefits and normalisation of third-party software licenses costs. 

 

EMPLOYEES
The company is on track to hire 15,000 freshers in FY25 and plans to hire 20,000 in FY26, ICICI Securities said. During the post-earnings press conference for Oct-Dec, the company had said that its hiring was strong during the quarter. During the December quarter, Infosys hired more than 5,000 employees and its Chief Executive Officer Salil Parekh had said that the hiring momentum would continue due to higher discretionary spending in some sectors. 

 

Ahead of the company's earnings, its shares closed nearly 1% lower at INR 1,413.10 Wednesday on the National Stock Exchange. The stock has fallen nearly 11% in the past 30 days and 25% so far in 2025. 

 

 

Following are the Jan-Mar earnings estimates for Infosys based on reports from 19 brokerage firms in descending order of the estimate of net profit:

 

Broking Firm	Net Profit (INR million)	Net Sales (INR million)	EBIT margin (in %)
HSBC Global Research	69,454	423,679	21.5
Equirus Securities Pvt Ltd	68,817	421,819
Systematix Shares and Stocks (India) Ltd	68,100	421,214	20.8
Nirmal Bang Equities Pvt Ltd	68,076	413,541	20.1
Sharekhan Ltd	67,720	419,330	20.6
Nuvama Wealth Management Ltd	67,202	420,964
Indsec Securities and Finance Ltd	67,100	421,200	86.9
Motilal Oswal Financial Services Ltd	67,000	422,000	20.6
InCred Research Services Pvt Ltd	66,991	420,858	20.8
Elara Securities (India) Pvt Ltd	66,444	415,409
Emkay Global Financial Services Ltd	66,287	421,788
Choice Equity Broking Pvt Ltd	65,858	418,979	20
Kotak Institutional Equities	65,801	417,672	20.7
ICICI Securities Ltd	65,771	423,609	20.8
Prabhudas Lilladher Pvt Ltd	65,700	414,100	20.3
IDBI Capital Market Services Ltd	65,600	416,323	20.6
PhillipCapital (India) Pvt Ltd	65,142	422,216	20.2
JM Financial Institutional Securities Pvt Ltd	64,884	416,171	20.4
Antique Stock Broking Ltd	64,811	423,073	20.3
Average	66,671.47	419,681.32	24.97

 

End

 

US$1 = INR 85.67

 

Edited by Deepshikha Bhardwaj

 

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