Infosys Q1: Emkay expects net to fall 5% at Rs 2312 cr

Emkay Global Financial Services has come out with its first quarter (April-June) earnings estimates for technology sector. The brokerage house expects Infosys to report a 3.4 percent degrowth quarter-on-quarter (growth of 1.1 percent year-on-year) in net profit at Rs 2311.8 crore.

Revenues are expected to increase by 5.3 percent Q-o-Q (14.5 percent Y-o-Y) to Rs 11,010.1 crore, according to Emkay. Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 3.4 percent Q-o-Q (down 2.5 percent Y-o-Y) to Rs 2,865.4 crore. Emkay report on Infosys We are building in a 0.7 percent Q-o-Q USD revenue growth with around 60 bps cross currency headwind. EBITDA margins are expected to decline by around 50 bps Q-o-Q to 26 percent on account of full quarter impact of onsite wage increments and continuous investments to boost volume growth. Profits are expected to decline by 3.4 percent Q-o-Q on account of higher taxes. Key things to watch out for (1) annual revenue guidance (we expect Infosys to retain its FY14 revenue growth outlook of 6-10 percent), (2) margin performance in the current quarter and likely trajectory ahead.