Infosys Q2 seen to be slowest Sept quarter since 2009

Infosys is expected to report net profit of Rs.3500 cr in July-September, up 1.8 per cent from Rs.3436 cr in Q1FY17. According to a media report, the IT Company may see dollar revenue growth of 2.3 per cent at 2559 million US dollars in Q2FY17 from 2501 million US dollars in quarter-ago period. In terms of rupee, revenue may increase 2.2 per cent at Rs.17150 cr compared to Rs.16782 cr quarter-on-quarter (Q-o-Q).

During the quarter, EBIT is seen at Rs.4182 cr against Rs.4047 cr while EBIT percentage is seen at 24.4 per cent versus 24.1 per cent on sequential basis. Infosys’ FY17 constant currency guidance is expected to be lower to 8.5-10 per cent from 10.5-12 per cent. Infosys had already lowered guidance to 10.5 per cent-12 per cent in constant currency from 11.5-13.5 per cent in last quarter. Dollar revenue growth may be lowered to 8-9.5 per cent from 10-11.5 per cent due to euro and GBP depreciation against dollar.

According to analysts, constant currency revenue growth is seen at 2.8 per cent on forex headwinds of 50 basis points (BPS). Q1 margins are likely to be at the lower end of 24-26 per cent. RBS contract loss shall be in effect till second half of FY17. The revenues from GST could be a partial offset however margins on this contract are likely rather low.

Meanwhile, at 2.41 pm, Infosys share price was trading at Rs.930.60, down 0.66 per cent on the NSE. 

BFSI shall remain to be a key area to watch out because it is one of the key verticals in sector, accounting for 25-40 per cent of revenues for leading companies. 
The IT giant has also indicated early signs of caution mostly in Europe because of Brexit. BFSI revenue growth led the IT sector through FY14 and the early half of FY15. Since then, growth has slowed down because financial institutions have been driving down costs – vendor consolidation and in-sourcing also hurt, at the margin.

For more details please visit Infosys share price history.