Infosys, Wipro growth likely to be flat for fourth quarter

BENGALURU: Though IT services company Tata Consultancy Services (TCS) posted a better-than-expected results and reported a 9% increase in its consolidated net profit for the fourth quarter, its peer Infosys is expected to report only 0.3% quarter-on-quarter revenue growth and Wipro is expected to post revenue degrowth of 0.1% sequentially in rupee terms.

Axis Securities expects the Infosys management to give 4.5% to 6% revenue growth guidance for FY25E. Also, margins are likely to expand marginally because of lower operating expenses.

The second-largest IT services company, Infosys, will announce its results for the March 2024 quarter on April 18, and Wipro will announce earnings on April 19. The brokerage expects Wipro’s operating margins to expand on account of lower onsite expenses.

As per ICICI Securities, Infosys could report a dip of 1.2% QoQ given a higher component of discretionary spending. It expects some traction in communication (ramp up from liberty deal), BFSI (from deals announced in Q4). Sharekhan expects Infosys to report flat EBIT margins. It said, “Sequential weakness is likely to be seen in Tech Mahindra, Infosys, and Wipro with sequential degrowth of 1.3%/0.5% and 0.4% in CC terms.”

In Q3, Infosys missed Street estimates, and posted a 7.3% drop in net profit at Rs 6,106 crore. It had revised its FY24 revenue guidance to 1.5-2% against 1-2.5% it had projected during the September quarter. It maintained its operating margin guidance for FY24 at 20-22%.