 "All eyes on Infosys' guidance for FY16")
Even as Infosys, India’s second largest IT services company, is set to announce financial numbers for Q4 and FY15 from its campus at Mahindra World City in Chennai, expectations are not so high this time, with other large peers showing not so impressive numbers for the same period.
While the impact of cross currency movements in a seasonally weak January-March quarter has impacted the numbers of IT majors, industry analysts will keenly await Infosys’s guidance for FY16 and the management commentary about the demand environment.
In a marked departure from its followed line, Infosys, which usually kick-starts the results season, is announcing them last this time. This is also the first time when the company is holding its board meeting as well as the quarterly results announcement outside of Karnataka, the state of its origin.
Earlier, the only other place outside of Bengaluru where it had announced the results was Mysuru, the palace city that houses the large global training centre as well as software delivery centre of Infosys.
Earlier, the only other place outside of Bengaluru where it had announced the results was Mysuru, the palace city that houses the large global training centre as well as software delivery centre of Infosys.
Soon after assuming the charge as the CEO & MD of the Bangaluru-based company in June last year, Vishal Sikka who is known as an ace technocrat has ignited the hopes of the investors community. Even though, he had made it clear that the steps that he had taken are expected to start showing results in the medium to long-term, the guidance the company gives for FY16 will show if it is moving in the right direction.
“Sikka has put in place several interesting initiatives after assuming office in August 2014, the most notable being a concerted effort to boost employee motivation and morale. On the revenue front, he has taken initial steps towards better customer connections and has turned the company's focus towards digital services-led M&A, if the recent acquisition of Panaya is any indication,” equity analyst firm UBS said in a recent note.
“Along with stronger than expected volume growth in 3Q FY15, we believe that has led to elevated investor expectations on revenue growth in FY16 and beyond. We believe the company will need to guide for stronger revenue growth in FY16 (we expect 8-10% guidance) to satisfy current street expectations,” it added.
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In a report issued last month, equity research firm CLSA had also stated that it was expecting Infosys to show a stronger revenue growth in FY16 and FY17. It, however, said that the margins growth of the company in FY16 is expected to be subdued while the company will manage to improve the same in FY17.
“We forecast YoY expansion in US-dollar revenue growth from 7% in FY15 to 15% in FY17,” the note on Infosys had added.