Earnings preview: BFSI to be the deciding factor for Infosys in Q3

Bengaluru-based IT giant Infosys (INFY) is scheduled to report third-quarter results on Friday, January 11, before the market opens. Analysts expect the company to post earnings of 13 cents per share against revenue of $2.95 billion.

INFY shares have gained 18% in the trailing 52-weeks period. However, after hitting a peak of $10.61 in September, shares have declined 8%.

Analysts expect the solid growth in US business as well as depreciation of Rupee to boost growth in an otherwise seasonally weak quarter. Currency fluctuation is also expected to lift margins by 40bps to 60bps on a quarter-over-quarter basis.

 

Meanwhile, all eyes will be on the BFSI (Banking, financial services, and insurance) segment, especially after weakness in the first quarter. Though it has picked up since, thanks to a lot of effort going into the regulatory side, investors will be looking forward to any insights that the management has to offer.

Also, most brokerages expect the company to keep its outlook unchanged.

In a statement to stock exchanges on Tuesday, Infosys said it would consider proposals for share buybacks and a special dividend during its board meeting to be held on January 11. Any announcements in this regard will be made along with the Q3 results.

Infosys posts in line Q2 profit

During the prior sequential quarter, Infosys reported a marginal rise in earnings helped by higher revenue and better cost management. Net profit rose 0.5% to $581 million, in line with analysts’ expectations. Meanwhile, revenue grew 7.1% to $2.92 billion.

 

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