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India's second-largest software services exporter, Infosys is expected to post 1.2-3.1 percent sequential growth in constant currency revenue in the June quarter. A Reuters poll of analysts sees profit at Rs 3,747.6 crore.
Analysts expect the margin to decline marginally to around 23 percent because of the impact of wage hikes and increased visa costs, offset partially by a weaker rupee.
The company will report June- quarter earnings on July 13.
Last quarter, Infosys had reported 28 percent sequential fall in net profit to Rs 3,690 crore. The profit decline was also because Q3FY18 included a positive impact of $225 million on account of the conclusion of an advance pricing agreement with the US IRS.
Revenue in the previous quarter was up 0.6 percent to Rs 18,083 crore.
The company reported EBIT margin of 24.3 percent last year and cut its margin expectation for the year to 22-24 percent from 23-25 percent it had projected last year. It is likely to report within this range.
Here are the things that the Street will watch out for:
BFSI commentary:
After rival TCS signaled a revival in the Banking, Financial Services, and Insurance (BFSI) business, all eyes will be on Infosys' commentary about its prospects. Infosys has been talking about slowness in the segment, which is its largest business vertical.
However, last quarter, Chief Operating Officer Pravin Rao said Infosys was "fairly optimistic" about BFSI, but the revival of growth would depend on the spend coming back in North America.
Digital business:
As with most of the industry, Infosys has also been focusing on ramping up its digital business. CEO Salil Parekh has said earlier that digital is worth over $160 billion of market opportunity.
"Commentary on the demand environment, strategy for digital, client spendings and deal wins will be the key monitorables," said analysts at Edelweiss Research in a pre-earnings note.
Deal win commentary:
TCS has been firing ahead with its large deal wins, and all eyes will be on Infosys' commentary on the total contract value of the deals it has signed and the demand environment.
Senior level attrition:
Infosys has been dealing with attrition at higher levels since the past couple of years, peaking last year. After the exit of its ex-CEO Vishal Sikka, followed by some others. The head of manufacturing Nitesh Banga and healthcare and life sciences division Sangita Singh were the most recent ones to call it quits.
Kotak Institutional Securities analysts pointed out commentary on "leadership attrition that seems to have reached worrying levels" as another key issue to watch out for in the results announcement on Friday.
Outlook:
Analysts largely expect Infosys to maintain constant currency revenue growth forecast of 6-8 percent for the year.
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