Q2FY23 Preview: Infosys: Revenue seen at Rs364,747 million, PAT at Rs58,212 million

12 Oct 2022 , 01:40 PM

Result date: 13^th October, 2022
Recommendation: Buy
Target price: Rs1,800

Infosys is likely to report industry-leading performance in the September 2022 quarter.

Analysts at IIFL Capital Services expect the company’s constant currency revenue to grow 4.5% sequentially, driven by broad-based momentum across verticals (ex-Mortgage and Retail). Deal momentum should remain healthy, as clients continue on their digital and cloud journey. Infosys’ margins could expand 20 basis points sequentially, despite partial wage hikes, driven by operational efficiencies and operating leverage.

Analysts at IIFL Capital Services expect Infosys to retain its guidance of 14-16% Y-o-Y growth in constant currency revenue growth and 21-23% EBIT margin for FY23.

Important management insights to watch out for:

• Deal wins and pipeline
• Any changes to FY23 guidance and vertical-wise outlook
• Margin levers in the second half of FY23, attrition trends and hiring
• Potential impact of furloughs in Q3
• Potential announcement of share buyback

	September 2022 estimates	QoQ change	YoY change
Revenue (US$ mn)	4,571	2.9%	14.3%
Revenue (Rs. mn)	364,747	5.8%	23.2%
EBIT (Rs. mn)	73,959	7.0%	6.1%
EBIT margin	20.3%	20 bps	(330) bps
Profit After Tax (Rs. mn)	58,212	8.6%	7.4%
EPS (Rs.)	13.9	8.6%	7.9%

Source: IIFL Research