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Infosys Q1 Results Expect lower sales and margins; here are some things to watch out for in Infosys’ Q1 results.

Infosys to announce Q1 earnings results for FY24 . Where to track, what to expect?

The Bengaluru-based software behemoth will announce its profits for the aforementioned period at 3:45 PM on July 20.

Infosys will release its financial results for the first quarter (Q1) of the fiscal year (FY) 2023–2024 on Thursday. The period ended on June 30. Following the earnings announcement, there will be a press conference and an earnings call.

infosys q1 results

With sluggish revenue growth and a potential reduction in operating margin due to project cancellations due to macro headwinds in the important markets in the US and Europe, Infosys, a major IT company, may report weaker-than-expected Q1FY24 results.

Investors will pay close attention to management commentary on FY24 projections as well as a forecast on discretionary spending, deals, profitability, and attrition.

Brokerage company Motilal Oswal Financial Services anticipates Infosys will post reduced revenue growth as a result of project cancellations. The brokerage firm also anticipates a possibility of moderating FY24 estimates.

According to projections from Motilal Oswal, revenue for Infosys could increase by 9.8% year over year (YoY) in terms of rupees. According to Motilal, profit after tax (PAT) may increase 17.8% year over year and 3% quarter over quarter.

Due to the salary increase and muted revenue performance, operating margin may decrease by 100 bps. Deal victories may continue to endure. Mega deals are currently in the works for Infosys. The outlook for transactions, margins, and FY24 projections are the main items to keep an eye on, according to Motilal Oswal.

According to projections by Kotak Institutional Equities, Infosys’ Q1FY24 revenue may increase by 9.8% YoY and reported PAT may increase by 14.1% YoY.

The trading business claimed that the March 2023 quarter’s low base, which also contained revenue reversals (close to 1% of revenues), provided a solid foundation for the quarter’s moderate growth. Also helpful are high billing days.

According to Kotak, the challenges include a general slowdown in discretionary expenditure, particularly in North America, as well as the full quarter impact of project cancellations that occurred in March 2023.

“We expect an EBIT margin decrease of 30 bps QoQ. Higher variable compensation (almost 80% against 60% in the March 2023 quarter) is a headwind in the quarter and has a 100 bps impact, according to Kotak.

“Another 30 bps disadvantage is the provision for post-sales client support (as opposed to reversal). The primary tailwind is a return to normalcy following a 90 bps impact from revenue reversals in Q4FY23. In our model, we have not accounted for wage revision. Deal

The focus will be on pipeline and TCV (total contract value). The size of the pipeline, the type of significant deals, the speed of decision-making, and the factors driving the consolidation trend will all be important areas of focus, according to Kotak.

In addition to expecting Infosys to stick to its forecast of 4–7% revenue growth, Kotak anticipates a solid TCV of wins driven by significant agreements. The 20–22% range for the EBIT margin guidance will not change. After a few senior leadership departures, the brokerage business said that senior management attrition will be the main focus.

https investors reports-filings/quarterly-results/2023-2024/q1.html

“We predict investors to focus on (1) mega-deal closures that are essential for achieving back-ended revenue growth guidance, (2) elements that give comfort in achieving back-ended revenue growth guidance, (3) margin levers, especially noting that back-ended growth guidance is based on typical large and mega-deals that dilute margins, (4) discretionary spending environment, especially in impacted verticals, and (5) reasons for senior leaderships exits and replacements,” said the company.

On a worse foundation than Q4, brokerage Phillip Capital anticipates current currency (CC) revenue growth of +0.8% QoQ. A sluggish start to FY24 may be caused by demand uncertainty in the BFSI, telecom, high-tech, and retail sectors, according to the brokerage firm.

“Margins are anticipated to stay flat as efforts from utilisation, sub-con, and pyramid optimisation will be countered by a probable rise in travel and facility expenditures. For Infosys in Q1, we have not factored in pay increases. We anticipate Infosys to stick to its guidance for FY24 of 4–7% CC revenue growth and 20–22% EBIT margin. Watch watch for the vertical outlook, transaction TCVs and pipeline, margin levers, attrition, and pricing, according to Phillip Capital’s FY24 guidance update.

Today’s morning BSE session saw a slight fall in Infosys stock of roughly 1%. The stock was trading 0.41% down on the BSE at 1,468.90 at 12:10 PM.

On December 1, 2022, Infosys stock reached a 52-week high of $1,672.45 per share. The stock is down about 12% from its yearly high as of July 18’s close.

What were the results for Q1FY23?

In the meantime, Infosys reported a consolidated net profit of 5360 crore in the first quarter of the prior fiscal year (FY 2022-23), an increase of 3.2% from 5195 crore in the year-ago period. On the other side, consolidated revenue increased by 23.6%, from 27,896 crore to 34,470 crore.

Disclaimer: Our site does not necessarily agree with the opinions and suggestions expressed above by certain analysts and brokerage firms. Before making any financial decisions, we suggest investors to consult with licenced professionals.


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