Infosys is expected to report a seasonally soft March quarter, with revenue seen under pressure from fewer working days and furloughs, while investor focus shifts to FY27 growth guidance, margins and large deal momentum.
Bloomberg estimates indicate reported revenue may still rise 1% quarter-on-quarter, while EBIT is seen up 17% and profit up 13%. EBIT margin is projected to improve to 21.22% from 18.37% in the previous quarter. Net employee additions are estimated at negative 4,317. Most brokerages expect constant currency revenue to decline sequentially despite support from the banking, financial services and insurance segment.
Infosys Q4 Preview (Consolidated, QoQ, Bloomberg Estimates)
- Revenue seen 1% higher at Rs 46,135 crore versus 45,479 crore
- EBIT seen 17% higher at Rs 9,793 crore versus Rs 8,355 crore
- EBIT margin seen at 21.22% versus 18.37%
- Profit seen 13% higher at Rs 7,496 crore versus Rs 6,654 crore
The key question this quarter is whether Infosys can deliver stronger growth in FY27 after a soft March quarter. Management commentary on client budgets, discretionary spending, deal renewals, large transformation programmes, artificial intelligence-led productivity, and the benefit from Project Maximus will be closely watched alongside formal revenue and margin guidance.
Here's what analysts are expecting from Q4 results
DAM Capital
- Expects revenue to decline 0.6% quarter-on-quarter in constant currency due to fewer working days and partial productivity pass-through.
- Deal wins expected to be decent but lower than the previous quarter due to absence of mega deals.
- BFSI expected to be the main growth driver.
- Investment in sales and lower volumes may offset benefits from rupee depreciation.
Kotak Institutional Equities
- Forecasts 1% quarter-on-quarter revenue decline due to fewer billing days and seasonal weakness.
- Third-party revenue expected to remain stable.
- Margins expected to stay stable as currency benefits are offset by higher visa costs.
- Other income expected to decline after completion of buyback, limiting profit growth.
- Large deal total contract value expected at $2.5-2.75 billion.
- Expects FY27 growth guidance of 3%-5% including the Versent acquisition and 2.25%-4.25% organically.
- Focus areas include geopolitical impact, AI deflation, client decision-making, large transformation programmes and Project Maximus benefits.
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Citi
- Expects revenue decline of 0.7% quarter-on-quarter in constant currency.
- Margins likely to improve modestly on currency support, with wage hikes not effective in Q4.
- Large deal total contract value expected around $3 billion.
- Focus areas include FY27 growth and margin outlook, and commentary on BFSI and other verticals.
Nuvama
- Forecasts revenue decline of 0.8% quarter-on-quarter in constant currency and 0.5% in dollar terms due to seasonal furloughs.
- BFSI expected to remain stable.
- EBIT margin likely to remain flat, supported by Project Maximus and currency tailwinds, partly offset by visa costs.
- Expects FY27 organic growth guidance of 2%-5% and margin guidance of 20%-22%.
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Nomura
- Expects revenue to decline 1% quarter-on-quarter in constant currency in a seasonally weak quarter.
- Pass-through revenues expected to be lower year-on-year.
- Discretionary demand in financial services expected to improve modestly.
- EBIT margin expected to decline by 40 basis points due to visa costs and non-recurrence of one-time gains from Q3.
Jefferies
- Expects revenue decline of 1.3% quarter-on-quarter in constant currency.
- Margins expected to remain flat as visa costs and fewer working days are offset by currency benefits and Project Maximus.
- Expects FY27 growth guidance of 2%-5% and margin band of 20%-22%.
- Large deal total contract value expected to remain steady.
- Focus on budgets, renewals, pipeline, discretionary spending, margin levers and AI adoption.
Goldman Sachs
- Expects flat quarter-on-quarter revenue in a seasonally weak quarter.
- Seeks more detail on recent acquisitions and reported client insourcing.
- Expects FY27 revenue growth guidance of 1.5%-4.5%.
- EBIT margin expected to improve modestly on currency support.
- Expects FY27 EBIT margin guidance of 20%-22%.
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