Infosys investors jittery! Can IT major deliver better Q3 numbers than TCS?

NEW DELHI: The second-largest IT major Infosys was trading flat on Friday ahead of its quarterly numbers, due later in the day, as investors turned cautious, a day after bigger peer Tata Consultancy Services reported earnings that missed market expectations by a whisker.

At 9.55 am, the stock was trading 0.08 per cent lower at Rs 1,074.75 on the BSE. Brokerage Nomura India expects the IT biggie to report 0.9 per cent sequential growth in constant currency (CC) terms. It also expects the software major to retain CC revenue growth guidance of 5.5-6.5 per cent.

Outlining of the strategy under new CEO and efforts to replenish management bandwidth lost due to attrition, outlook on BFSI, retail and manufacturing verticals, any escalation of costs or pushback in GST deal and impact of US tax reforms would be key things to watch out for, the brokerage said.

The country's largest IT firm, TCS on Thursday reported 1.3 per cent quarter-on-quarter (QoQ) rise in net profit at Rs 6,531 crore for the quarter ended December 2017. It had posted net profit of Rs 6,446 crore in the sequential quarter ended September 2017.

Nirmal Bang Institutional Equities noted that even as Infosys expects aggregate demand environment for the industry to probably remain largely unchanged in FY19, the company remains confident of its ability to drive better growth for itself, given improving competitive positioning in digital services.

New services, which represented 9.4 per cent of overall revenues in Q2 FY18 and witnessed revenue growth of 14 per cent QoQ, should sustain the momentum in H2FY18, Nirmal Bang said in a note.

Infosys may report a growth of 1.4 per cent in dollar revenues, with a cross currency tailwind of 14 basis points, KR Choksey Shares and Securities said. This brokerage believes that seasonal weakness and poor performance at BFSI and retail segments would lead to a muted performance.

The IT major would announce its results around 3,45 pm