Infosys Q3 Results Review - Third-Party Items, Likely Longer Tenure Deals Are Key Issues: Nirmal Bang

"BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Nirmal Bang Report.Infosys Ltd.’s Q3 FY23 constant currency QoQ revenue growth at 2.4% came in ahead of our 1.6% estimate, but with ~110 basis points gain coming from pass-through of ‘third-party items for service delivery to clients’. Ebit margin at 21.5% was lower than our estimate (22.3%) as we believe that Infosys could not fully benefit from the 3% Indian rupee/U.S. dollar QoQ move due to currency hedging. Post the revenue beat, Infosys has raised revenue growth guidance for FY23 to 16-16.5% in CC terms from earlier 15-16% but has kept the margin guidance intact at 21-22% (lower end indicated). Infosys’ large deal total contract value at $3.3 billion (36% net new) is the best in the last eight quarters. We believe this has been helped by more cost optimisation deals where tenures are longer, resulting in lower annual contract value. Infosys incrementally added ‘investment banking’ within the banking and financial services vertical to the already highlighted problem areas like mortgage, retail, hi-tech and telecom. Pipeline was indicated to be strong, but we suspect that it is burgeoning due to slower decision making by clients and a greater number of large-sized cost optimisation deals with longer tenures. .Click on the attachment to read the full report:.More Research Reports On Infosys' Q3 FY23 Results Review.Steady Performance; Well Placed To Manage Near Term Uncertainty: Yes SecuritiesWell Positioned In A Challenging Macro: IDBI CapitalStrong TCV Bookings; Revenue Guidance Increased Further: ICICI DirectGuidance Implies Soft Q4; Signs Of Macro Slowness Discerning: Dolat CapitalStrong Bookings To Insulate Near-Term Revenue Growth: Motilal Oswal .DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Infosys Q3 Results Review - Third-Party Items, Likely Longer Tenure Deals Are Key Issues: Nirmal Bang

Q3 CC QoQ revenue grew, but with 110 bps gain coming from pass-through of ‘third-party items for service delivery to clients’.

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Infosys Q3 Results Review - Third-Party Items, Likely Longer Tenure Deals Are Key Issues: Nirmal Bang

Q3 CC QoQ revenue grew, but with 110 bps gain coming from pass-through of ‘third-party items for service delivery to clients’.

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