Infosys Q2 Results Preview: Revenue, Profit Likely To Improve, Guidance May Be Raised

Infosys Ltd., which is set to announce its earnings for the second quarter of the current financial year on Thursday, is expected to see a growth in revenue, profits and margin. 

The IT services major's consolidated net profit may rise 7% sequentially to Rs 6,815 crore in the quarter ended September, according to a consensus of analysts' estimates tracked by Bloomberg.

Infosys Q2 FY25 Earnings Estimates (Consolidated, QoQ)

• Revenue may rise 3.5% to Rs 40,707 crore.

• Profit may rise 7% to Rs 6,815 crore.

• EBIT margin may expand 30 basis points to 21.4%.

• EBIT may rise 5.2% to Rs 8,726 crore.

Morgan Stanley expects Infosys to lead revenue growth by reporting organic constant currency sequential revenue growth of 2.8%. Bank of America expects this kind of revenue growth, including inorganic growth.

Large deal ramp-up and hiring in the second quarter should be margin headwinds. However, subcontractor optimisation and the positive impact of value-based selling should be able to negate the headwinds, according to JM Financial.

Motilal Oswal sees the company's operating margin inch down 80 basis points due to reversal of one-offs, large deal investments and decline in utilisation.

In terms of guidance, BofA, Morgan Stanley and Motilal Oswal expect Infosys to upgrade its full-year guidance by 50 basis points, while Ambit Capital expects it to maintain it. 

Infosys has guided for revenue growth of 3–4% for the fiscal. The company raised its revenue forecast, citing significant large deals during the April–June period.

On demand commentary amid a cautious environment, ICICI Securities underscores that cost efficiency focus and deal consolidation will continue. Traction in financial services is expected to continue from the first quarter; higher traction in hi-tech and recovery in communication is also expected, it adds. 

The company secured 34 large deals in the first quarter, its highest ever, with a total contract value of $4.1 billion, 57.6% of which were net new. Ahead of Q2 results, ICICI Securities notes that deal wins have been flat QoQ, slightly on the lower side.