Infosys earnings to be driven by large deals, digital offerings, weaker rupee in Q3FY22; Stock rallies 1.5%

12 Jan 2022 , 11:42 AM

Infosys stock was on a bullish tone during Wednesday’s trading session ahead of its financial performance for the quarter ending December 2021 (Q3FY22).

At around 11.37 am, Infosys was trading at Rs1884 per piece up by Rs27.95 or 1.5% on Sensex. The stock was near the day’s high at Rs1884.35 per piece.

In Q3FY22, Infosys is set to benefit from a weaker rupee vis-à-vis the US dollar. The company’s top-line is expected to be higher on the back of the continued ramp-up of large deals and adoption of cloud and digital offerings. Also, stabilization in attrition numbers on a quarterly annualized basis is expected.

Key highlights to watch in the Q3FY22 would be – deal pipeline, client budgets 2022, management commentary, the impact of Omicron spread on the earnings ahead, supply-side challenges and LTM attrition trends.

The company is expected to upgrade its FY22 revenue guidance.

In September 2021 quarter-ending, Infosys posted a better-than-expected quarter where its bottom-line and top-line front both recorded a double-digit growth on a year-on-year basis. Infosys garnered a net profit of Rs5,421cr in Q2FY22 rising by 11.9% from Rs4,845cr a year ago same period. Infosys registered revenue of Rs29,602cr in the quarter under review, increasing by 20.5% from Rs24,570cr witnessed in the corresponding period of the previous year.

Infosys delivered a strong Q2 performance with YoY growth increasing to 19.4% and sequential growth accelerating to 6.3% in constant currency. In Q2, the company had increased its revenue growth guidance to 16.5%-17.5%.