Info-tech

For the first time ever, Infosys delays announcement of Q4 numbers

K Giriprakash Bengaluru | Updated on April 09, 2020 Published on April 09, 2020

The Infosys Ltd logo   -  Bloomberg

No fresh date set for announcement, say sources

Perhaps for the first time in its history, Infosys is expected to delay the declaration of its quarterly results because of the uncertainty surrounding the IT sector following the coronavirus pandemic.

Sources close to the company said that the fourth quarter results of Infosys will be delayed and that no fresh date has been finalised yet.

Analysts tracking the company and the sector said that it is likely that Infosys might delay its FY21 growth/margin guidance to the subsequent quarters.

“Even if they were to guide, these guidance bands will likely be wider than usual and subject to sharp revisions later on, as clients relook at their IT budgets,” Motilal Oswal in a note to its investors, said. It said given the unprecedented level of uncertainty around the global macro and the multiple moving parts, visibility on near-term growth/profitability is challenged.

The note said deal signings during Q4 (especially in the second half) will likely be a key area of investor focus as it is the latest available proxy for demand.

“In addition, qualitative cues around the adaptability of different companies to the new work paradigm will be the key thing to watch out for.”

This may include their ability for end-to-end digitisation of key processes like deal signings, employee onboardings and deal ramp-ups.

Rishit Parekh of Nomura said Infosys is expected to deliver 0.2 per cent quarter-on-quarter constant currency (CC) growth in Q4FY20 (at the lower end of the guidance range for Q4). Infosys had indicated an impact of $8-10 million (0.3 per cent of quarterly growth) due to lost billings in China, though presence in Italy is small. “There could be lower investments in sales/digital and lower travel costs partly offset by lower utilisation, investments to adapt WFH and cross-currency impacts (INR depreciated 1-3 per cent vs USD/GBP/EUR).”

Parekh also wrote in the note that deal-win numbers are likely to be lower for Infosys on, 1) post the sharp rise in the past three quarters (average of $2.4 billion), and 2) delay in decision-making in March. “While the guidance is less relevant in the current context, we expect Infosys to start the year with a guidance of low to mid-single-digit CC revenue growth and retain EBIT margin guidance to 21-23 per cent.”

Published on April 09, 2020

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