Key things to watch out for in Infosys results

The results of the Bengaluru-based IT services provider comes days after a muted show by IT behemoth TCS.

IT major Infosys would be announcing its results for the quarter ended June 2019 today. The results of the Bengaluru-based IT services provider comes days after a muted show by IT behemoth TCS. Here are the key things to watch out for:

Margins

The margins of the company might be impacted on the back of the wage hike and strengthening of the rupee vis-a-vis dollar in the past quarter. EBIT margin to decline 110 bps due to wage revision for 85% of employees that will impact margins by 100 bps, higher H-1B visa applications relative to the previous year that will result in additional costs, and a rupee appreciation impact of 30 bps.

Profitability

Most analysts expect the company’s net profit to fall in the range of 10-17%, on the back of escalation in the costs and stronger rupee.

Guidance

Amid escalating costs, the IT major is expected to maintain its full-year guidance for revenue at 7.5-9.5% and EBIT margin at 21-23%.

Investor perks

As part of the Infosys’ capital allocation policy, the company distributes Rs 13,000 crore out of its free cash flow among its shareholders. Shareholders would be keenly watching for what is in store for them.

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