Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the technology sector. The brokerage house expects Infosys to report a 2.7 percent degrowth quarter-on-quarter (growth of 4.4 percent year-on-year) in net profit at Rs 3013.2 crore.
Sales are expected to increase by 4.8 percent Q-o-Q (up 10 percent Y-o-Y) to Rs 14051.6 crore, according to Motilal Oswal.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 0.6 percent Q-o-Q (up 9.1 percent Y-o-Y) to Rs 3755.2 crore.
Motilal Oswal's Report on Infosys:
Infosys' constant currency revenue growth guidance of 10-12 percent YoY in FY16 implies 3.1 percent CQGR to meet the lower end.
For 1QFY16, we estimate constant currency revenue growth of 2.8 percent QoQ, and reported USD revenue growth of 2.5 percent QoQ, partially contributed (0.5pp) by acquisitions.
In rupee terms, our revenue growth estimate is 4.8 percent QoQ, on the back of 2.2 percent sequential depreciation in INR v/s USD
We expect EBITDA margin to decline 110bp QoQ to 26.7 percent, despite favorable INR, due to INFO’s wage hikes becoming fully effective during the quarter.
Our other income estimate for the quarter is INR7.6b, compared to INR8.8b in the previous quarter.
Our PAT estimate is INR30.1b, down 2.7 percent QoQ due to lower margin and other income.
The stock trades at 17.4x FY16E and 14.9x FY17E earnings.
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