Q3FY24 Preview: Infosys: Revenues seen at Rs. 385,720 million, PAT at Rs. 62,147 million

9 Jan 2024 , 11:16 AM

Result date: January 11, 2023

Recommendation: Buy

Target price: Rs. 1,700    

Analysts at IIFL Capital Services are forecasting 1.1% cc sequential revenue decline for Infosys, on continued weak demand (amid pressure on discretionary spends) and furlough impact. They expect deal momentum to moderate in the December 2023 quarter due to the absence of mega deals. Margins should contract 60 basis points sequentially, due to partial impact of wage hikes and muted growth. Analysts at IIFL Capital Services expect Infosys to cut the upper end of the FY24 revenue growth guidance to 1-2% cc and maintain EBIT margin guidance of 20-22%. 

The company’s Profit After Tax or PAT could stay flat on a sequential basis.

Important management insights to watch out for:

• Ramp up timelines for previously won large deals
• Deal wins and pipeline
• Initial discussions around CY24 tech budgets
• Progress on project Maximus
• Margins puts and takes
• Capital allocation

	December 2023 estimates	QoQ change	YoY change
Revenue (US$ mn)	4,647	(1.5)%	(0.3)%
Revenue (Rs. mn)	385,720	(1.1)%	0.7%
EBIT (Rs. mn)	79,372	(4.1)%	(3.7)%
EBIT margin	20.6%	(60) bps	(90) bps
Profit After Tax (Rs. mn)	62,147	0.0%	(5.6)%
EPS (Rs.)	15.0	0.0%	(4.4)%

Source: IIFL Research