Infosys may miss Q1 operating profit: forecast StarMine

ITinfosys-careers major Infosys Ltd may miss April-June operating profit consensus forecast when it reports results on Friday, according to StarMine data.

StarMine’s SmartEstimates, which places greater emphasis on forecasts by top-rated analysts, expects Infosys % to report an operating profit of Rs 2893 crore($475.31 million) for the quarter compared with a consensus mean estimate of Rs 2994 crore.

Shares in Infosys are up 1.1 per cent at 0811 GMT. According to analysts, India’s top 50 companies are expected to report a 7% year-on-year growth in revenue and 6.5% growth in profit at the aggregate level for the quarter ended June 2013, a sign that demand is still not growing significantly.

According to latest estimates by the ET Intelligence Group, India’s most frequently traded large companies are broadly in line to report a revenue growth closer to 6.2% in the previous quarter, a clear sign that demand is yet to pick up in the face of headwinds such as the sliding rupee, weak export growth and high inflation. However, net profit growth in Q1 will be far better than the previous quarter, when profit fell 7% due to the high base effect in the comparable quarter a year ago.

The analysis shows top-line growth of Nifty 50 companies will remain below 10% for the third straight quarter as consumers and firms continue to control costs and spending against the backdrop of a clouded economic outlook.

The software services sector will be able to report revenue growth largely on account of foreign exchange benefits. But, the level of forex hedging losses will limit the benefits to these companies’ bottom lines. Sectors related to infrastructure activities will continue to disappoint for yet another quarter.

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