Infosys shares rose 3% on Friday ahead of the company's results for the July–September quarter, The Economic Times reported. The stock has climbed 16% in the past month.
What analysts expect
On average, seven brokerages expect India's second-largest IT services company to report revenue of about ₹49,384 crore for the quarter, up 11% from ₹44,490 crore a year earlier. Net profit is expected to rise 8%, to about ₹7,965 crore from ₹7,375 crore.
Analysts also expect Infosys to lower its revenue growth forecast for the full year, because clients are spending less on discretionary projects, AI is putting pressure on prices, and decisions are taking longer.
Investors will watch what management says about client spending, large deal wins and how AI is affecting its traditional IT services business. The results close the season for India's big IT companies, after TCS, HCL Technologies, Wipro and Tech Mahindra.
The last quarter
In the April–June quarter, Infosys's net profit rose 12% to ₹7,769 crore, and revenue grew 14% to ₹48,211 crore. Its operating margin was 21.1%. AI accounted for 8.2% of revenue, and large deals worth $3.6 billion were signed.
At the time, the company forecast revenue growth of 1.5% to 3% in constant currency for the full year, cutting the upper end of its range, and an operating margin of 20% to 22%.
Why the stock has bounced
Infosys shares are still down 27% this year. The recent rally came as worries about huge AI spending triggered a sell-off in global AI stocks. Analysts say that has helped Indian IT companies, which they see as gaining from an "anti-AI" trade.
Over the longer term, the stock is down more than 16% in three years and 31% in five years. Infosys is worth about ₹4.18 lakh crore on the market.
This article reports brokerage estimates and is not investment advice.