Infosys Q3 Preview: Profits may jump by 11%, revenues to rise by 6%

Infosys Q3FY25 Preview: Indian information technology (IT) company, Infosys, is scheduled to deliver its October-December quarterly earnings for the financial year 2024-25 (Q3FY25) on Thursday, January 16, 2025. 

 

According to analyst estimates compiled by Business Standard, Infosys may see its average revenue rise by 6.3 per cent year-on-year (Y-o-Y) to Rs 41,298 crore as against Rs 38,821 crore in the third quarter of FY25. Sequentially the topline may increase by 0.7 per cent compared to Rs 40,986 crore in Q3FY25.

 

Moreover, the IT major may register an average net profit of Rs 6,820 crore for the December quarter, against Rs 6,106 crore in Q3FY24, which translates to an increase of 11.6 per cent Y-o-Y for Q3FY25. 

 

On a quarterly basis, profits could rise by 4.8 per cent. The company reported a profit after tax (PAT) of Rs 6,506 crore in the December quarter of FY24. 

 

Here's what key brokerages anticipate for Infosys Q3 FY25 results:

 

Nuvama Institutional Equities: Nuvama Institutional Equities anticipates Infosys to deliver revenue growth of +0.8 per cent quarter-on-quarter (Q-o-Q) in constant currency (CC) terms, while remaining flat Q-o-Q in US dollar terms.  Ebit margin is expected to improve by approximately 30 basis points (bps) Q-o-Q, driven by the impact of Project Maximus, partially offset by seasonal furloughs. Nuvama expects Infosys to upgrade its revenue growth guidance to 4.5-4.75 per cent CC year-on-year (Y-o-Y) and maintain a margin outlook of 20-22 per cent for FY25.

 

Motilal Oswal: Motilal Oswal projects revenue growth for Infosys at 1.0 per cent Q-o-Q CC, though seasonal furloughs are likely to weigh on performance. The firm expects the second half of the fiscal year to be weaker than the first half, as some growth was front-loaded.  Operating margin is anticipated to dip by 30 bps, affected by furloughs but partially offset by tailwinds from pricing improvements, subcontractor cost optimisation, and Project Maximus. The margin is projected at 20.8 per cent. 

 

The brokerage also forecasts strong deal TCV (total contract value) in Q3 and improved demand commentary. They expect flow business recovery in calendar year 2025 to support growth, with Infosys likely to maintain its revenue guidance of 3.75-4.5 per cent for the full year.

 

PL Capital: Analysts at the brokerage expect Infosys to post 0.5 per cent Q-o-Q CC growth, citing the impact of furloughs. A currency headwind of 80 bps in Q3 is expected to result in a 0.3 per cent Q-o-Q revenue decline in reported terms.  Ebit margin is projected to improve slightly by around 20 bps Q-o-Q to 21.2 per cent, despite the lack of operating leverage. PL Capital expects a marginal increase in its revenue guidance while maintaining its margin guidance for FY25. 

HDFC Securities: Infosys is expected to post a sequential growth of +0.7 per cent in constant currency (CC) terms, reflecting continued growth momentum in the horizontal.  The company is also likely to revise its growth guidance upwards for the fiscal year. Margin guidance is expected to remain unchanged, showcasing Infosys's focus on maintaining operational stability while driving growth.