Motilal Oswal has come out with its fourth quarter (January-March) earnings estimates for the technology sector. The brokerage house expects Infosys to report a 3.9 percent degrowth quarter-on-quarter (growth of 4.3 percent year-on-year) in net profit at Rs 3121.8 crore.
Revenues are expected to increase by 0.7 percent Q-o-Q (up 7.9 percent Y-o-Y) to Rs 13892.4 crore, according to Motilal Oswal.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by 1.3 percent Q-o-Q (up 7.1 percent Y-o-Y) to Rs 3902.4 crore.
Motilal Oswal's Report on Infosys:
In 3QFY15, INFO retained its guidance of 7-9 percent YoY growth in FY15 at currency rates prevailing as on September 30, 2014. This implied that the guidance does not factor the significant depreciation of global currencies v/s the US dollar.
Factoring the same, the restated guidance on prevailing currency rates is growth of 5.4-7.4 percent. Our current estimate is 6.4 percent growth, at the midpoint of this guidance (USD8.8b).
For 3QFY15, we expect INFO to grow its revenue by 0.7 percent QoQ to USD2.23b. In CC terms, we expect a revenue growth of 2.7 percent, and cross currency to have a negative impact of 200bp QoQ.
We expect the EBIT margin to decline 70bp QoQ to 26 percent due to headwinds faced from cross currency movements. Our other income estimate for the quarter is INR6.9b, while the PAT estimate is INR31.2b, down 3.9 percent QoQ.
The stock trades at 19.4x FY16E and 16.5x FY17E earnings.
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