infosys q2 results preview: Infosys Q2 Preview: Growth seen better than TCS, all eyes on demand outlook – Blue Barrows

Helped by strong deal momentum and discretionary spending by clients, is seen reporting a sequential growth in the topline for the quarter ended September, that is better than peer ().

The consolidated revenue for the quarter is expected to rise 6.4 per cent sequentially to Rs. 36,691 crores, according to the average of estimates given by eight brokerage firms. TCS had reported a 4.8% sequential growth in revenue for the quarter.

In terms of constant currency, however, the sales growth is likely to have slowed down in the backdrop of volatile currency movements during the quarter.

The rupee has depreciated 3.6% against the dollar in July-September, pound has depreciated 8% and Euro over 6% against the greenback.

As a result, analysts expect the Bengaluru-headquartered IT major to report a 3.8-4.7 per cent constant currency growth sequentially, compared to the 5.5 per cent growth in the April-June quarter.

Even though cross currency headwinds hit sales growth in Q2 and are expected to have an impact in Q3 as well, analysts unanimously see

retaining its constant currency revenue growth guidance of 14-16 per cent for 2022-23 (April-March), when it releases numbers on Thursday.

Consolidated net profit of Infosys is seen rising 11 per cent sequentially to Rs. 5,934 crore, the average of eight estimates showed.

On a year-on-year basis, the topline is seen rising a sharp 24 per cent and the bottomline by 9.5 per cent.


After seeing steep erosion in profitability in the last few quarters, Infosys is also seen getting some respite and report an expansion in operating margin.

Analysts expect margins to improve by 20 basis points to as much as 100 bps sequentially from 20.1 per cent.

“EBIT margin is expected to expand by 90 bps on account of operating efficiencies, pyramid rationalization, subcontracting cost optimization, and rupee depreciation,” Emkay Global Financial Services said in its report.

Analysts also see Infosys retaining its margin guidance of 21-23 per cent for FY23.

But they would want to understand the pricing scenario in order to gauge the sustainability of margin recovery.


The deal wins during the September quarter, and the outlook on the deal pipeline will be at the top of investors’ radar. Infosys’ TCV large deal wins stood at $1.7 billion in Q1.

The street will be keen to know the management’s assessment of the situation in the US and Europe and if clients have started sounding cautious.

Peer TCS had earlier in the week said that the level of uncertainty has increased but clarity on client budgets will emerge over the next three months.

The view on attrition and hiring will be another major monitorable for investors. Attrition is likely to have risen further in Q2 from 28.4 per cent in Q1, but analysts see this moderating in the ensuing quarters.

Infosys also said that the board will consider share buyback. The quantum and the mode of the buyback will also be closely tracked by investors.

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