Infosys Q3FY22 Preview: Revenues seen at Rs309,823 million, PAT at Rs58,568 million

12 Jan 2022 , 08:14 AM

Result date: 12th January, 2022
Recommendation: Buy
Target price: 2,150

Infosys is likely to report 4% sequential growth in revenues on a constant currency basis. Continued ramp up of large deals (including the one with Daimler) will drive revenue growth of the company. Continued adoption of cloud and digital offerings by clients augur well for the company and is reflected in healthy deal momentum.

Infosys’ EBIT margin is estimated to grow by 30 basis points to 23.9%. Benefits arising from a weaker rupee vis-à-vis the US dollar are likely to offset higher costs of employee hiring. Even as the reported LTM attrition could continue to trend north, some stabilization is expected in the attrition number on a quarterly annualized basis.

Important management insights to watch out for:

– Deal wins and deal pipeline
– Update on client budgets for 2022
– Outlook on key verticals for 2022
– Potential upgrade to FY22 revenue guidance
– Supply side challenges and attrition trends

	December 2021 estimates	QoQ change	YoY change
Revenue (US$ mn)	4,128	3.3%	17.4%
Revenue (Rs. mn)	309,823	4.7%	19.5%
EBIT (Rs. mn)	74,026	6.2%	12.3%
EBIT margin	23.9%	30 bps	(150) bps
Profit After Tax (Rs. mn)	58,568	8.0%	12.7%
EPS (Rs.)	14.0	8.6%	14.1%

Source: IIFL Research