Infosys in focus ahead of Q3 results

Shares of Infosys have moved higher by 2.6% to Rs 1,077 on the BSE ahead of the third quarter results tomorrow on January 14, 2016.

A global leader in consulting, technology, outsourcing and next-generation services, will announce the results for its third quarter ended December 31, 2015 (Q3) on Thursday, January 14, 2016 around 8:45 a.m., Infosys said in a regulatory filing.

Most of the analysts expect Infosys to maintain its cross currency (CC) revenue growth guidance of 10-12% YoY for FY16.

“The dollar revenue growth is likely at 1.1% quarter on quarter (QoQ) at US$ 2,419 million, CC revenue growth of 1.5% QoQ, earnings before interest and tax (EBIT) margin decline of 66 basis points (bps) QoQ. We expect Infosys to maintain its CC revenue growth guidance of 10-12% YoY for FY16,” HDFC Securities said in a results preview.

Edelweiss Securities expect the company to maintain its CC guidance of 10-12% and adjust its annual guidance for cross currency movement.

We expect Infosys to post increased momentum in its total contract value from the $ 850 million quarterly range to $ 1 billion in the current quarter and would also like to see percolation of attrition cool off in its margin, the broking firm said in a Q3 preview.

While the company has hinted for increased investments and a decline in margins, we believe some benefit of Indian rupee depreciation, utilisation improvement and attrition cool off will help it maintain flattish margins this quarter, added report.

According to Karvy Stock Broking, the dollar revenue growth expected to be 1.0%. Cross currency negative impact of 30 bps. The margins to decline around 30 bps due to investments on digital front and Chennai flood impact. Expect revenue guidance for FY16 to remain unchanged in constant currency as well as in USD terms.

Nomura however, expects Infosys to raise its lower end FY16F USD CC revenue growth guidance to 11% (vs 10% earlier), while retaining its top end growth guidance at 12%.

Meanwhile, post Q2 (July-September) quarter results, since October 9, 2015, the stock underperformed the market by falling 12% as compared to 9% decline in the S&P BSE Sensex till yesterday.

At 10:50 a.m. the stock was up 2.3% at Rs 1,073 against 0.81% rise in the benchmark index. A combined 677,516 shares changed hands on the counter on the NSE and BSE.