Motilal Oswal has come out with its fourth quarter (Januray-March) earnings estimates for the technology sector. The brokerage house expects Infosys to report a 0.6 percent growth quarter-on-quarter (growth of 12.5 percent year-on-year) in net profit at Rs 3484.4 crore.Sales are expected to increase by 4.2 percent Q-o-Q (up 23.6 percent Y-o-Y) to Rs 16,575 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 5.1 percent Q-o-Q (up 21.9 percent Y-o-Y) to Rs 4,549.2 crore.Motilal Oswal's Report on Infosys:Infosys raised its FY16 guidance in the previous quarter to 12.8-13.2 percent Y-o-Y CC, from 10-12 percent earlier. This implies 4Q guidance of 1-2.4 percent Q-o-Q CC. We expect revenue to grow 2.1 percent Q-o-Q CC, which would represent the strongest 4Q for INFO in the last six years.In INR terms, revenue growth estimate is 4.2 percent Q-o-Q on the back of 2.3 percent sequential depreciation in INR v/s USD. We also expect deals wins to improve compared to 3Q, given delays in signing of some deals in the previous quarter.We expect EBITDA margin to expand 20bp Q-o-Q to 27.4 percent. The factors that we expect to play on margins are INR depreciation, improved utilisation, and pricing pressure.Our PAT estimate is INR34.8b, up 0.6 percent Q-o-Q due to the impact of forex losses on other income. The stock trades at 17.7x FY17E and 15.8x FY18E earnings.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.
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