Infosys Q2 preview: Revenue and net profit likely to improve; here are key things to know ahead of Q2 earnings

India’s second-largest IT services player, Infosys, will report its September quarter results on October 17. After TCS and HCL Technologies, this will third major IT firm to report its Q2 numbers.

According to experts, Infosys is expected to report single-digit revenue growth for the second quarter of the current financial year, driven by deal ramp-up from foreign clients and AI initiatives.

Investors will monitor margin numbers, deal pipeline, FY25 guidance, and key financial metrics. Investors will also keep an eye on the impact of the 450-million euro acquisition of engineering R&D services provider In-tech on its margins.

Infosys likely to post 3-4% revenue growth

Experts believe Infosys is likely to report revenue in the range of ₹40,506 to ₹41,024 crore for the July- September quarter of FY25. This translates into a year-on-year growth of 3-5%. Large deal ramp-ups, AI deal wins, and digital initiatives will likely fuel revenue growth. Generative AI and discretionary demand would be key catalysts for growth.

Infosys may post up to 12% rise in Q2 net profit

According to experts, Infosys is likely to report a net profit of ₹6,431 to ₹ 7,154 crore for the September quarter, up 9 to 11%. Improved margins and cost optimisation are likely to aid net profit numbers.

Focus on EBIT margins amid headwinds

EBIT margins will remain in focus amid headwinds faced by the company. Experts believe the company’s EBIT margins to remain in the range of 20.4% to 21.4% in the September quarter. The company reported EBIT margins of 21.1% in the June quarter of FY25.

Infosys may see some hit on the margin front due to large deals and hiring in Q2FY25. However, the impact could be lower by cost optimisation and value-based selling.

IT major may upgrade revenue guidance

Investors will be keenly watching the management commentary on the general environment amid expectation of further interest rate cuts in the key US market. Also, there are expectations that Infosys may raise its FY25 guidance for revenue from 3-4% to 4-5%, in line with rival HCL technologies.

TCV deals, attrition level key points to watch out for

Investors will closely watch the company’s outlook on large deal total contract value (TCV) and hiring trends.

The company’s commentary on discretionary spending trends, banking vertical and cost takeout projects will also be under the investor’s radar. The company reported a large deal with a TCV of $4.1 billion in the June quarter.

Infosys posted 3.6% YoY growth in Q1 revenue

Infosys had reported a 3.6% growth in revenue for the June quarter of FY25 at ₹39,315 crore. Its net profit stood at ₹6,368 crore in the Q1 of FY25, a growth of 7.1% over the year-ago period. Operating margins stood at 21.1%.

Infosys share price reaction

Shares of Infosys Ltd. have remained largely flat in the past week ahead of the company’s Q2FY25 earnings announcement. At 2:15 p.m., the stock was trading 1.14% lower at ₹1,936.4 apiece on the NSE.

The IT stock price has dropped 1% in the past five days and has remained flat for over a month. Year-to-date, Infosys shares have gained over 25.9%.