Angel Broking has come out with its January-March quarter earnings estimates for the technology sector. The brokerage house expects Infosys to report a growth of 16.5 percent year-on-year (down 3 percent sequentially) in net profit at Rs 2788 crore.
Sales are expected to increase by 24 percent Y-o-Y (down 0.5 percent Q-o-Q) to Rs 12966 crore, according to Angel Broking.
Angel Broking report on Infosys:
During the quarter, Infosys indicated that it has continued to see weakness in client spending and it may only be able to meet the lower end of its annual revenue growth guidance of 11.5-12.0 percent for FY2014. The management indicated that at the broad level some of the clients have seen slowdown in their businesses; these are across various verticals, leading to unanticipated project ramp downs and cancellations in 4QFY2014. This leads us to expect a marginal de-growth of 0.3 percent Q-o-Q in USD revenues for Infosys.
We expect the EBITDA margin of Infosys to decline by 30bp Q-o-Q to 27.5 percent on account of slowdown seen by the company in spending by customers in hi-tech and retail & CPG verticals and random project cancellations which are expected to have hurt overall volume growth.
On the back of slight rupee appreciation and soft volume growth, profitability of Infosys is expected to be hit due to weak operational performance.
Infosys's FY2015 revenue growth guidance is expected to be at 7-9 percent.
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