Infosys will announce its second-quarter earnings for FY25 on October 17. While it saw sequential revenue growth in the previous quarter, the IT giant is expected to witness yet another strong quarter, with analysts positive about a guidance raise. Here are some key performance indicators:

Revenue growth

According to a poll of brokerages, revenue is predicted to be around ₹40,584 - 41,230 crore, yet another sequential improvement from last quarter’s ₹39,315 crore.

An Axis Securities report predicts Infosys might report strong revenue q-o-q growth, making it the highest among the large-cap peers. On a y-o-y basis, revenue growth is likely to be between 5.5 per cent and 8.7 per cent, up from Q2FY24’s ₹37,933 crore. The IT giant is reported to experience sequential revenue growth of 3.2-4.9 per cent and 2.4-3.0 per cent q-o-q in constant currency (CC) terms.

Margin & Guidance

Infosys is likely to record earnings before interest and tax (EBIT) margin of 20.9-21.5 per cent, according to a poll of brokerages. The company might register flat growth from Q1FY25’s recorded operating margin of 21.1 per cent. Margins may decline by 20 - 80bps as the reversal of one-offs and large deal investments will weigh on profitability.

“Margins for the sector are likely to be largely range-bound in Q2 as wage hikes have been deferred to H2FY25,” said a Motilal Oswal report.

While some brokerages predict Infosys will maintain its growth guidance of 3-4 per cent for FY25E, a BNP Paribas report sees the IT giant reporting a strong quarter and raising its guidance.

“We find comfort in Infosys’ strong digital capabilities to benefit from the discretionary demand-led demand recovery. Infosys offers the highest earnings upgrade potential in our coverage,” it said. The company might raise its revenue growth guidance by 50 bps to 3.5-4.5 per cent.

Deals & TCV

Infosys’ expected dollar revenue is anticipated to grow 3.0 per cent q-o-q (2.4 per cent q-o-q in CC, 2.1 per cent organic dollar) due to continued ramp-up of mega deals, volume growth, and 90 bps from in-tech acquisitions, noted the BNP Paribas report.

In the quarter-ended June, the large deal total contract value (TCV) stood at $4.1 billion, a decline from Q4FY24’s $4.5 billion. Infosys, alongside most companies, is expected to report strong deal wins TCVs q-o-q.

Attrition & Hiring

Infosys’ total headcount fell by 1,908 employees to 3,15,332 in Q1, from 3,17,240 the previous quarter. Voluntary attrition during the quarter rose to 12.7 from 12.6 per cent in Q4.

“Many IT Services companies plan to add 25,000 to 50,000 employees each in FY25, emphasising roles in cloud computing, AI, and cybersecurity. Almost 70 per cent of future IT hiring will be concentrated in digital skills, reflecting the increasing demand for talent in areas like data analytics and automation. Reskilling efforts are ramping up, with companies training existing employees for next-gen technologies,” said Neeti Sharma, CEO of TeamLease Digital.

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