Infosys Q3 Earnings: Profit Dips 7% YoY, Revenue Growth Stalls

Infosys expects a 7% YoY net profit drop to Rs 6,108 crore, with minimal revenue growth. Ebit margin may fall to 20.2-20.8%. Key focus on FY24 outlook and reasons for a major AI deal cancellation.
Infosys Q3 Earnings Profit Dips 7% YoY, Revenue Growth Stalls

Infosys, a prominent IT company, is expected to see a decrease in its net profit for the December quarter compared to last year and the previous quarter. Analysts predict a 7% year-over-year drop to Rs 6,108 crore and a 1.7% decrease from the previous quarter. The company’s revenue is also expected to show minimal growth, with only a 0.9% increase from last year, reaching Rs 38,660 crore, and a 0.9% decline from the previous quarter.

The company’s EBIT margin, a measure of profitability, will likely fall slightly to between 20.2% and 20.8%, down from 21.2% in the previous quarter. Experts from Kotak Institutional Equities and Equirus Securities believe Infosys might lower its revenue growth forecast for the financial year to 1-2% from the earlier 1-2.5%.

Several important factors will be closely watched, including the company’s outlook for the next financial year, any changes in revenue forecasts, client decision-making processes, and budgets for 2024. Additionally, comments on recent senior management departures and the reasons behind canceling a large AI project will be of interest.

Emkay Global suggests that Infosys might narrow its revenue growth prediction to 1-2% and maintain its 20–22% EBIT margin forecast. Investors are particularly interested in the management’s insights on early discussions with clients, expectations for IT budgets in 2024, and the reasons for ending a $1.5 billion deal.

Infosys has scheduled a press conference at 4:30 p.m. IST and a 60-minute conference call at 6:30 p.m., where senior management will discuss the company’s performance and answer questions.

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