Infosys and HCL Technologies (HCL Tech) would report their December quarter results post market hours today. Analysts expect Infosys to report a 11-15 per cent year-on-year (YoY) rise in profit growth, while, for HCL Tech, they see profit growth in single digits. Revenue-wise, Infosys is seen clocking 19-20 per cent growth YoY compared with HCL Tech’s 16.5-17.5 per cent. Infosys margin are seen in wide range of 21.5-23.5 per cent. For HCL Tech, margins are seen in 18-19 per cent range. Both the IT majors are expected to retain FY23 guidance.
Profit growth
Sharekhan sees profit for Infosys at Rs 6,563 crore, up 13 per cent YoY over Rs 5,809 crore in the year-ago quarter. PhillipCapital sees the Salil Parekh-led firm to report a profit of Rs 6,657 crore, up 14.6 per cent YoY. Nirmal Bang, which has a sell rating on the IT sector, sees Infosys profit at Rs 6,546.70 crore, up 12.7 per cent. Motilal oswal sees profit for Infosys rising 11.2 per cent YoY to Rs 6,500 crore.
In the case of HCL Tech, Nuvama Institutional Equities sees profit growing 8.1 per cent YoY to Rs 3,722 crore from Rs 3,443 crore YoY. Nirmal Bang Institutional Equities sees HCL Tech to report 9.3 per cent YoY rise in net profit at Rs 3,762.90 crore. Sharekhan, however, expects HCL Tech to report 11.1 per cent YoY rise in net profit at Rs 3,825 crore.
Sales growth
Sharekhan sees revenue for Infosys rising 19.6 per cent YoY at Rs 38,107 crore from Rs 31,867 crore in the same quarter last year. PhillipCapital sees Infosys revenues at Rs 37,935 crore, up 19 per cent. Nirmal Bang has a similar estimate. This brokerage is expecting Infosys revenues at Rs 37,992 crore, up 19.2 per cent.
For HCL Tech, Nuvama sees revenues rising 16.5 per cent YoY to Rs 26,005 crore from Rs 22,331 crore. YoY. Nirmal Bang sees HCL Tech sales growing 16.7 per cent YoY at Rs 26,055 crore. Sharekhan sees sales for the IT major rising 17.4 per cent YoY to Rs 26,214 crore.
Margin
For Infosys, ICICIdirect sees Ebit margin at 21.9 per cent against 21.5 per cent in September quarter and 23.5 per cent in the year-ago quarter. Infosys margin is seen lagging behind at 22.7 per cent, down 149 basis points, as per Sharekhan estimates. PhillipCapital estimates Infosys margin at 21.6 per cent. Nirmal Bang sees Infosys margin at 23.5 per cent.
For HCL Tech, Nuvama sees Ebit margin for HCL Tech at 18.4 per cent against 17.9 per cent in the September qaurter and 19 per cent in the year-ago quarter. Axis Securities and Nirmal Bang see HCL Tech margin at 18.5 per cent.
Dollar, CC revenue growth
Sharekhan expects HCL Tech to report highest CC revenue growth of 3.6 per cent QoQ among Tier 1 IT companies. It sees dollar revenue growth at 3.7 per cent QoQ. Motilal Oswal expects HCL Tech to report 5 per cent QoQ revenue growth in CC terms. It sees dollar revenues rising 5.4 per cent sequentially.
“We are expecting 3 per cent CC growth QoQ, which is 2 times compared to the 2nd fastest growing company in tier-1 players. We believe that its Services business will grow at 2.7 per cent CC QoQ while the P&P segment will see modest growth of 5 per cent QoQ,” said Nirmal Bang.
For Infosys, ICICIdirect sees Ebit margin at 21.9 per cent against 21.5 per cent in September quarter and 23.5 per cent in the year-ago quarter.
Infosys margin is seen lagging behind at 22.7 per cent, down 149 basis points, as per Sharekhan estimates. PhillipCapital estimates Infosys margin at 21.6 per cent. Nirmal Bang sees Infosys margin at 23.5 per cent.
Guidance
HCL provided an intra-quarter update wherein it expected revenue growth to be at the lower end of 13.5-14.5 per cent band for FY2023 and EBIT margin to be 18 per cent. Analysts largely do not expect the IT firm to change that outlook. Infosys too is expected to retain its FY23 guidance of 15-16 per cent CC YoY revenue growth and also the EBIT margin guidance of 21-22 per cent.
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