The shares of IT major Infosys dipped over 1 per cent in early trade on Thursday amidst weak earnings forecast during the current results season. Infosys is likely to post a de-growth in the range of -0.1 to -1.7 per cent, on a quarter-on-quarter (QoQ) basis, according to a poll of brokerage.

Shares were down 1.09 per cent at ₹1503.40, indicating volatility in anticipation of subdued Q3. The revenue growth is noted to be impacted by a lower number of working days and higher-than-expected furloughs, and continued macro challenges.

Brokerages expect EBIT margins to decline in the 72-100 bps range. Margin headwinds for the quarter are wage hikes and muted revenue growth. The company is expected to maintain its guidance regarding healthy deal wins and a strong pipeline.

Infosys reduced its growth guidance for FY24 from 4-7 per cent to 1-3.5 per cent after Q1 and then revised it further downward to 1-2.5 per cent after the second quarter.

Large deal total contract value (TCV) stood at $7.7 billion in Q2 ($2.3 billion in Q1) which was also the highest TCV clocked by Infosys in a quarter. TCV in Q3 is expected to moderate as the quarter didn’t see multiple large deal signings as the previous one.

Motilal Oswal, in its report, said, “Deal pipeline remains healthy while closure remains a bit challenging due to slower decision making and furloughs. However, the conversion remains on track.”

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