India?s second largest IT services firm, Infosys, is expected to take the lid off the September quarter?s technology earnings calendar on Wednesday, reporting robust revenue numbers, but all eyes are on its full-year revenue guidance. Most brokerage houses expect Infosys to maintain its annual dollar revenue growth guidance of 18-20%, despite a fluttering global economy and weakness in its bread-and-butter vertical, banking and financial services (BFSI).
Analysts said they would closely watch the firm?s second quarter performance in BFSI, Europe, its third quarter guidance and the management?s commentary on the demand scenario in FY 13 as well as deal pipelines to decode any signs softness in the coming quarters. ?The guidance from Infosys will be important. We expect dollar volume growth guidance to be maintained. The uncertain macro-environment may lead to continued conservatism from the management, despite no indications of any impact at the customer level, as yet. If Infosys guides for 2HFY12 September-end exchange rates, the rupee guidance will be scaled up,? Dipen Shah of Kotak Securities said.
As far as the September quarter is concerned, things are on track. While the firm may lag TCS in volume growth, it is expected to beat its own Q2 guidance, while expanding its margins. In rupee terms, brokerage houses see Infosys reporting sequential revenue growth between 6% and 9% and profit growth between 4% and 12% during the quarter.
?We expect Infosys to report a revenue growth of 7.5% in rupee terms, with volume growth of 5.1% for Q2FY12, beating their top-end guidance in both, dollar and rupee terms. We expect pricing improvement to remain muted on q-o-q basis. The margins may expand by 111 basis points for the quarter due to currency depreciation and cost absorption,? brokerage house Prabhudas Lilladher said in a report.
Motilal Oswal noted that Infosys will be the only company amongst top tier firms not to be impacted by wage hikes or promotions during the quarter.
Analysts expect Infosys to revise its annual R earnings guidance upwards. Brokerage house Sharekhan noted that it anticipates the firm to guide for a 4%-4.5% sequential growth in revenues for Q3FY2012 and revise upwards the EPS guidance for FY2012 to around R131-133 from R128.2 and R130.1 guided earlier on account of rupee depreciation.