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Infosys Q1FY22 revenue beats expectations, say analysts; guidance a positive

Updated : July 14, 2021 19:30:13 IST

IT major Infosys on Wednesday reported a net profit of Rs 5,195 crore in Q1FY22, registering a growth of 2.34 percent as compared to Rs 5,076 crore in the previous quarter.

Net profit was lower than CNBC-TV18 analysts' poll estimates of Rs 5,402 crore. The company's revenue was at Rs 27,896 crore as against the CNBC-TV18 analysts' poll expectations of 27,718 crore.

"Revenue growth is much ahead of our expectation, the margin is a bit of disappointment, deal wins look strong and the positive thing is that they have raised their guidance from 12-14 percent to 14-16 percent. They have also retained their margins guidance. So I am forecasting 17 percent revenue growth for FY22," said Suyog Kulkarni of Reliance Securities.

According to Kulkarni, attrition remains a worry and the impact of margins need to be seen for the next couple of quarters.

"Deal environment and strong deal demand remain a much dominant story," he added.

How does it stack up against TCS? Infosys had outperformed TCS in the last quarter.

"Currently, the TCS premium over Infosys has shrunk to a low single-digit number. But going ahead for both the names, we expect a double digit revenue CAGR for the next couple of years and that will provide valuation support to both Infosys and TCS. The higher valuation is likely to continue because of the resiliency of demand and that will reflect in the revenue growth", analysed Kulkarni.

Also Read: Infosys Q1 net profit rises 2.3% to Rs 5,195 crore; raises FY22 CC revenue growth forecast to 14-16%

The industry is facing supply-side concerns and attrition has been going up across the board, noted Amit Chandra of HDFC.

"The offshore shift continues and in larger deal wins there is a higher component of offshoring. So margin is a near-term concern but I think it is manageable," he added.

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