Q4 results 2024: Should you buy Infosys shares as market expects ’modest’ numbers

Q4 results 2024: After the announcement of Tata Consultancy Services or TCS results for Q4FY24, the market is eagerly waiting for the other Indian IT company's results for the recently ended March 2024 quarter. According to stock market experts, Infosys management may deliver a 'modest' guidance for the the financial year 2024-25. They predicted a healthy deal pipeline and growth for the Indian IT major in Q4 results 2024. However, they also maintained that better utilization rates and the absence of one-time costs might be offset by wage hikes in November 2023. Overall, they predicted better Q4 numbers for the company against the quarterly numbers Infosys delivered in Q3FY24.

Infosys Q4 results 2024 preview

Speaking on Infosys results for Q4FY24, Dhruv Mudaraddi, Research Analyst at StoxBox said, "We expect Infosys revenue growth to be flat QoQ on account of delays in the ramp-up of large deals, pricing challenges, and seasonal softness. The operating margin is expected to be flat as well as better utilization rates and the absence of one-time costs will be offset by weak growth and wage hikes in November 2023. Further, we expect Infosys to give a modest mid-single digit guidance for FY25 owing to a healthy deal pipeline and growth albeit experiencing difficulties ramping up as clients remain hesitant. We would watch out for management outlook on the demand in FY25E/26E, pricing trends and pass-through of costs, large deal wins pipeline, client sentiment and budgets, and growth & margin guidance for FY25E."

Comparing the Infosys Q4 results 2024 with the TCS Q4 numbers, Amit Goel, Co-Founder & Chief Global Strategist at Pace 360 said, "Indian IT firms are gearing up to unveil their Q4 results. Last week, Tata Consultancy Services (TCS) reported a profit that surpassed street estimates. TCS recently disclosed its financial performance for the fourth quarter of FY2024. As India's second-largest company by market value, TCS recorded a net income of ₹61,237 crore for the final quarter of the last fiscal year," adding."Infosys' revenue for the fourth quarter of FY24 is anticipated to decline by 0.3% sequentially to ₹38,576 crore for the same period.

In terms of net profit margins, TCS is expected to experience a modest increase to 20.3% for the reviewed quarter, compared to 18.32% in the December 2023 quarter. Conversely, Infosys' net profit margins are projected to reach 15.97% for the given quarter, compared to 15.73% in the preceding quarter."

Infosys share price target

On the outlook for Infosys shares, Sumeet Bagadia, Executive Director at Choice Broking said, "Infosys share price has made a strong base at ₹1370 apiece level. So, those who have Infy shares in their portfolio are advised to hold the scrip maintaining strict stop loss at ₹1370 apiece level. The Indian IT major is facing resistance at the ₹14.50 per share level. Once it breaches this resistance on a closing basis, Infosys share price may soon touch ₹1470 to ₹1500 per share level in the short term."

On how the Q4 numbers of Infosys would be against the Q3 results, Dhruv Mudaraddi of StoxBox said, “Infosys’ Q4FY24 revenue will be in-line with their Q3FY24 result as the cross-currency tailwinds in the quarter will be offset by lower third-party software sales. The EBIT margin will however expand owing to the softer effect of wage hikes which were announced in Q3FY24 and the lack of a one time expense. Further, the large deal TCV is expected to be in the similar range of USD 2.5bn to 3.5bn as the overall discretionary spending environment and client decision making has not improved.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.