Infosys is well-positioned to lead growth among tier-I IT companies in the June quarter, with a sequential growth of nearly 3%. This growth is largely driven by the ramp-up of multiple mega deals, optimising operational efficiencies, and a one-off revenue impact adjustment from the previous quarter, various brokerage firms said.
The average of five brokerage firms expects Infosys’ revenue to rise to Rs 38,948 crore in April-June from Rs 37,923 crore in the March quarter. The company is set to announce its Q1 earnings on July 18.
“We forecast sequential revenue growth of 2.5%, led by a ramp-up of multiple mega deals and the one-off impact of 100 basis points on revenues in the March quarter from rescoping of engagement with a financial services client—providing a low base and effectively a 1% kicker to the June quarter’s growth numbers,” said Kotak Institutional Equities.
The firm also anticipates Infosys will maintain its fiscal year 2025 revenue growth guidance between 1-3%, with the earnings before interest and tax (Ebit) margin guidance remaining steady at 20-22%. Nomura supports this outlook, predicting a 3.0% sequential growth driven by large deals and a favourable adjustment from a one-time BFSI client contract restructuring.
On the profitability front, Infosys is expected to see a 70 basis point sequential increase to 20.8% in operating margin, also known as Ebit margin. This improvement is largely due to the absence of a one-off impact that previously compressed margins, alongside reduced visa and subcontractor charges and improved employee utilisation rates, brokerage reports said.Other brokerages like JM Financial, ICICI Securities and Motilal Oswal Financial Services echoed similar sentiments on revenue growth and margin expansions driven by strategic deal wins and operational efficiencies.
“We are building 2.1% q-o-q cc revenue growth with notable margin tailwinds from the absence of visa costs and partial reversal of one-time impacts,” JM Financial said in a report.ICICI Securities anticipates a 2% constant currency sequential revenue growth, emphasising the traction in high-tech and BFSI sectors due to significant deals. Meanwhile, Motilal Oswal expects a revenue growth rebound to 2%, driven by the ramp-up of large deals won in the previous fiscal year.
Regarding total contract value (TCV), Kotak Institutional Equities forecasts a large deal of $3 billion for the quarter. “The focus will be on the translation of revenues from large deals signed in earlier quarters,” the brokerage report said.In terms of sectoral performance, particular attention is on the banking, financial services, and insurance (BFSI) sector, which has been underperforming. The discretionary spending environment and management commentary on the sector will be pivotal, analysts said.