Infosys had beat analysts' expectations in the first three quarters of FY16. Will it continue to do so in Q4? We will know the answer to the question on April 15. According to an average of analyst estimates polled by CNBC-TV18, the country's second largest IT company is likely to deliver 1.07 percent sequential growth in profit at Rs 3,502 crore in January-March quarter.
Revenues are seen rising 4 percent quarter-on-quarter to Rs 16,545 crore and dollar revenues may increase 2 percent to USD 2,454.5 million during the quarter.
January-March is a seasonally weak quarter for the company as it reported negative growth in same period of the last two years.
According to analysts, some key tailwinds include a reversal of the Chennai flood impact and an extra working day (leap year), which partly offset the cross-currency headwinds (pound). They see small contributions from Noah Consulting that Infosys acquired in November 2015.
Earnings before interest and tax in Q4 are expected to increase 3.8 percent to Rs 4,111 crore but the EBIT margin may be slightly flat at 24.85 percent against 24.9 percent in the preceding quarter.
Infosys raised its FY16 guidance in the last quarter, so the Street will closely watch whether it will be meeting that guidance or not. The company expects constant currency revenue growth at 12.8-13.2 percent (against 10-12 percent earlier) and dollar revenue growth at 8.9-9.3 percent (against 6.4-8.4 percent).
Apart from Q4 and FY16 earnings, the key factors to watch out for on Friday will be revenue and margin guidance for FY17.
Analysts expect dollar revenue growth guidance at 11-13 percent in constant currency and margins at 24-26 percent after considering a strong commentary of CEO & MD Vishal Sikka.
Sikka had guided returning to industry leading growth in FY17. If it delivers this, then it will be the strongest guidance in the last three years, feel analysts. Nasscom expects the IT industry to grow 10-12 percent in FY17. Analysts say near-term prospects of the company look promising on strong client mining in top accounts and recent large deal wins.
The stock has re-rated in the last one year on the back of its improving growth momentum, hitting a life high of Rs 1,249.90 on April 4.
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