Infosys will declare its fourth quarter results along with its fiscal year performance on Friday and analysts are predicting some positives going by the recent commentary from the IT major on the near-term revenue projection and overall demand outlook. However, there are a few points to watch out for:
Revenue guidance: Infosys boosted the investor sentiment at the third quarter of FY16 when it raised the annual revenue guidance in constant currency terms to 12.8-13.2%. Now the focus will be on the guidance the IT major will provide for FY17 as it has already stated that it would outperform the benchmark set by Nasscom of 10-12%.
Citi in its note said, “Infosys has been indicating that the company should return to industry leading growth in FY17. In the context of Nasscom guidance being at 10-12%, this might imply FY17 growth guidance of at least 11-13%.”
Margins: The company which always enjoyed superior operating profit margins among its peers has now been operating in the range of 24-26%. There is an indication that it is unlikely to move upwards at least in the medium term. However, the market would be watching out for the commentary as conditions seem to be favourable considering the higher level of utilisation and the depreciated value of the rupee against the US dollar.
Deal momentum: There has been a pickup in the volume of large deals by Infosys during the first half of FY16. Infosys has witnessed certain strong engagements on this front by entering into various multi-million long terms deals. It remains to be seen whether it would be able to sustain in FY17.