Since July 13, 2018, post Q1FY19 results, Infosys has outperformed the market by gaining 8.5%, as compared 5% declined in the S&P BSE Sensex. The stock hit an all-time high of Rs 755 on October 1, 2018 in intra-day trade.
Analysts at Prabhudas Lillahder expect Infosys to report 2.9% QoQ constant currency (CC) revenue growth for 2QFY19. Cross currency headwind would be around 80bps for the quarter. Hence, reported USD revenues would grow by 2.1% QoQ. We expect Infosys to maintain its guidance for 6-8% CC revenue growth for FY19E and EBIT margin guidance of 22-24% for FY19E, it added.
Infosys to maintain its revenue growth guidance of 6-8% in constant currency for FY19E. Infosys has announced a slew of deals over the past few months and hence we expect continued confidence in revenue momentum. Infosys likely to announce buyback in January 2019 as cited in its capital allocation strategy, the brokerage firm said in an earnings preview.
“Compared to the weak start to FY19 (0.9% QoQ CC growth in Q1), we expect acceleration now, led by seasonal strength and an improvement in verticals like BFS, resulting in 3.5% QoQ CC growth for Q2FY19,” Motilal Oswal Securities said in results preview.
“We expect constant currency revenue growth of 2.8% and cross currency headwind of 70 bps. Q2 is a seasonally strong quarter. EBIT margin will increase by a modest 30 bps on a sequential basis. Nearly 100 bps of margin tailwind from currency will be offset by wage revision for senior management and investments in sales transformation and investments in digital competencies. Expect Infosys to maintain c/c revenue growth guidance of 6-8%. The company's stance on margin guidance band of 22-24% in light of the recent rupee depreciation will be interesting to watch for,” according to Kotak Securities.
Organizational distractions have led to a delay in competency development and mindshare in some aspects of digital for Infosys. Net profit growth is muted on yoy comparison due to lower treasury income after the company completed buyback of shares in December 2017 quarter. We expect investor focus on growth from financial services vertical, TCV of deal wins that has started looking up, leadership attrition that seems to have reached worrying levels, account mining metrics and pricing outlook and progress on automation, the brokerage firm said.