Seven things to look for in Infosys Q2 results today

The country's second largest IT services provider Infosys is coming out with its second-quarter results at 4 pm on Tuesday, amid a strengthening dollar.

The company has managed to sustain its $1 billion deal wins. In a recent interview, company's COO UB Pravin Rao had said: "From a pipeline perspective, we are confident, but we have to wait and see whether we will be able to sustain it till the next few quarters before really setting up a bigger target."

Here are the seven things that you should be looking for:

1) Impact of a strong dollar: The company earns over 67% of its revenues from the US geography - highest among the Tier I companies. Aided by a strong dollar, Tata Consultancy Services (TCS) recently saw its earnings jump by 23%. It would be interesting to know how does it impact Infosys' earnings.

2) Impact of attrition: The company’s attrition in the last quarter spiked up to 20.6% last quarter, a historical high. More disconcerting for the company was elevated attrition in the category of high performers as well. So, it would be interesting to see if there would be any impact on the bottom line as the company may dole out extra benefits to its employees.

3) Hiring: TCS, last week, said that it has seen the highest net addition in the workforce during the last quarter. TCS also said that it's planning to hire 28,000 fresh graduates this year. It would be interesting to see, with IT services business picking up again, how Infosys is positioned.

4) Shareholder benefits: In April 2018, the company announced a Rs 13,000 corpus for its shareholders under capital allocation policy. A special dividend of Rs 10 per share ($0.15 per ADR) resulting in a payout of
approximately Rs 2,600 crore (approximately $400 million) in June 2018 was paid by the company. Shareholders would be keenly looking at the allocation of remaining Rs 10,400 crore.

5) Growth in digital: Infosys’s digital business grew 25.6% in constant currency terms and accounted for 28.4% company’s revenue in the first quarter. One of the reasons behind TCS’s early uptick in performance has been the scorching growth in digital, as TCS’s digital business grew 60% y-o-y in the second quarter. With company's CEO and MD Salil Parikh's emphasis on digital business, it is interesting to see how would company fare in it.

6) Vertical revenues: The company saw its revenues in Banking and Financial Services and Insurance (BFSI), that constituted a whopping 31.8% of the company's revenues, decline by 1.5% in the April-June quarter.

7) New CFO: Although there are bleak chances of the company announcing its new CFO in the quarterly results, it's a thing to watch for. Outgoing CFO MD Ranganath's term ends mid-November.

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How will attrition impact Infy's Q2 earnings?