Infosys Q2 EBITDA margin likely to expand 140 bps QoQ: MOST
Revenues of Infosys are expected to increase by 13.1 percent Q-o-Q (up 29.2 percent Y-o-Y) to Rs 12,738.5 crore, according to Motilal Oswal.
October 09, 2013 / 17:58 IST
Motilal Oswal has come out with its second quarter (July-September) earnings estimates for the technology sector. The brokerage house expects Infosys to report a 11.9 percent growth quarter-on-quarter (up 12.1 percent year-on-year) in net profit at Rs 2,655.8 crore.
Revenues are expected to increase by 13.1 percent Q-o-Q (up 29.2 percent Y-o-Y) to Rs 12,738.5 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 19 percent Q-o-Q (up 23.6 percent Y-o-Y) to Rs 3,550.2 crore.Motilal Oswal's Report on InfosysInfosys' guidance of 6-10 percent growth in annual USD revenues implies flattish CQGR to meet the mid-point and 1.45 percent CQGR to meet the higher end of the guidance. We expect the company to beat the higher end of its implied revenue growth guidance for FY14.We expect overall revenues to grow 2.4 percent Q-o-Q to USD 2.04 billion. This includes negative impact of 60bp from cross-currency, implying CC revenue growth of 3 percent Q-o-Q. In rupee terms, we expect revenue growth of 13.1 percent Q-o-Q to INR 12,740 crore.EBITDA margin is likely to expand 140bp Q-o-Q, as tailwinds from 10.4 percent Q-o-Q depreciation in INR should be offset by 200bp headwind from offshore wage hikes becoming effective during the quarter.Infosys has been aggressive in addressing cost optimization, and we expect some gains from the lower hanging fruits to show on margins
as well. We expect overall utilization including trainees to increase by 60bp Q-o-Q to 73 percent.We expect PAT to grow 11.9 percent Q-o-Q to INR 2,655.8 crore led by higher margins during the quarter.The stock trades at 16.1x FY14E and 14x FY15E EPS.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
