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Earlier in July, when reporting Q1 results, Infosys raised its revenue growth expectation for the current to be between 3% and 4%, which was higher than the 1% to 3% guidance the firm had issued during the March quarter.
As Infosys Q2 results near, several analysts believe it might increase growth guidance. If it is not upgraded, it will be a negative for the firm, according to global brokerage CLSA, which has maintained its guidance expectation at current 3-4%.
Kotak Institutional Equities and Citi expect the Bengaluru headquartered firm to issue guidance of 4-5% and 4-4.5%, respectively, for the current fiscal year.
Analysts believe there is scope to hike guidance considering Q1 revenue growth was 3.6% and in the July to September quarter, the firm’s revenue is likely to have risen 3%.
Infosys’ revenue in rupee terms came in at ₹39,315 crore, beating the CNBC-TV18 poll projection of ₹38,905 crore. In constant currency terms, revenue growth stood at 3.6% sequentially, well above the 2.4% growth anticipated by analysts.
The company has also guided its EBIT margin to remain between 20% and 22%. EBIT margin in the previous quarter expanded by 100 basis points to 21.1%, higher than the estimate of 20.7% and the March quarter figure of 20.1%.
In May 2024, Salil Parekh, MD and CEO of Infosys, in an exclusive interview with CNBC-TV18, said that the firm’s exceptional performance in securing large deals is a primary driver of the outlook.
The stability in discretionary spending, which has remained consistent and hasn’t worsened, adds another layer of confidence. The pickup in the financial services sector and the transformative impact of generative AI are among other elements that support the growth outlook, he said.
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