Analysts expect Infosys to upgrade its annual revenue outlook by a notch on Friday, when it announces quarterly results — its second in a row following company’s co-founder NR Narayana Murthy’s return from retirement to steer the IT firm after it was losing ground to competitors.
Infosys had earlier projected an annual revenue growth of 9-10%, well below the industry average of 12-14%. Industry observers said they do not expect the company to show any dramatic improvements in its net profit and revenue figures in its third quarter (October-December) results.
“We expect Infosys to upgrade its annual revenue outlook to 11-12% and a slight improvement in its margins when it announces the third-quarter results,” said Dipen Shah, a research analyst at Kotak Securities. Shah added that he does not expect any “big surprise” when Infosys announces its results tomorrow.
Ankita Somani, an analyst with Angel Broking explained that though the third quarter is traditionally a weak quarter for all IT firms due to an extended holiday season, Infosys is expected to do slightly better than previous quarters. “The irritants for the company are declining and I do expect that there will be an upgrade in annual revenue outlook.”
The attrition rate at Infosys is 17.3%, slightly higher than the industry average of 14-15%. Analysts have repeatedly raised concerns over the exodus of employees from the company and feared that it might further shrink the IT giant’s market share.
Over the last six months since Murthy came back as the executive chairman of Infosys, eight senior executives have quit the company of which Ashok Vemuri and V Balakrishnan were frontrunners for the chief executive’s chair.