After the disappointing show by TCS, Indian IT majors Infosys and Wipro are all set to release their earnings on Wednesday. Analysts expect Infosys to upgrade growth guidance for fiscal 2022 to 16-18 percent from the previous 14-16 percent. After TCS Q2 results, investors are focused on Infosys and Wipro Q2 earnings.
Infosys Q2 preview
Infosys is expected to report better and bigger results in the September quarter with its sustained deal momentum and continued contributions from one of its largest Daimler deals. Analysts from broking firm Phillip Capital expect the company to raise its growth guidance for the current financial year to 16-18 percent from the previous 14-16 percent.
Other analysts expect Infosys to report revenue growth of around 6 percent for Q2 compared to the last quarter. At the same time, Analysts at Goldman Sachs expect the company to be the fastest-growing large-cap IT company in the current fiscal year.
“While valuations are stretched for the IT sector, we continue to like Infosys and TCS on the back of their digital revenue leadership, cloud-based solutions, and sector relative attractive valuation,” said a report by Goldman Sachs.
According to a report, Infosys’ early investment in building a sales and marketing team to stitch together large digital deals and focus on cloud platforms creates industry-leading contract win momentum. The company’s deal wins are up 86 percent YoY in the last year with contributions from many large deals, including Daimler and Roll Royce.
A report from IIFL Securities said that a continued ramp-up of significant deals won earlier would lead to the revenue growth of Infosys.
Wipro Q2 preview
Analysts expect an upbeat show by Wipro for the second quarter, with revenue rise projections ranging between 25-29 percent YoY. Wipro’s revenue growth will be driven by the ramp-up of large deals and contribution from Capco and Ampion acquisitions.
Many industry experts assume that Wipro’s net profit will rise in double-digits in Q2 yearly. Additionally, they expect a decline quarter-on-quarter, mainly due to a reduction in operating margins that will take a hit on wake hikes and full quarter impact from the integration of Capco.
ICICI Securities forecast that Wipro is expected to report a 6 percent growth in revenues QoQ due to organic growth of 4 percent and the acquisition of Capco. Deal wins, second wage hike, vertical commentary, client’s IT budget, and revenue guidance will be key areas of investor interest.
All the IT stocks declined heavily on Monday after IT giant TCS announced its financial performance for the September quarter as experts considered it below the estimates.