Shares of Infosys Ltd and Wipro Ltd are in focus on Friday morning as the American Depositary Receipts (ADRs) of the two IT majors declined 4-6 per cent overnight in US trading, even as Infosys reported better-than-expected Q3 results and upgraded its yearly revenue guidance.
Infosys Ltd ADR shares dropped 5.77 per cent to $21.57 apiece. Wipro Ltd ADR shares fell 4.07 per cent to $3.30 apiece. Wipro is scheduled to report its quarterly earnings today.
Infosys reported a better than expected Q3FY25 results with an all-round beat on Streets estimates, demonstrating continued resilience in a mixed demand environment.
"Revenue growth was at 0.9 per cent/ 1.7 per cent QoQ in USD/CC terms respectively against our expectations of -0.3 per cent/0.6 per cent in USD/CC terms and margins at 21.3 per cent against our expectations of 20.5 per cent. Higher pass-through revenue and inorganic contribution from In-tech acquisition supported this beat," Nirmal Bang Institutional Equities said.
The brokerage said the uptick in discretionary projects in BFSI and small deal wins will translate into faster revenue conversion. But tepid large deal wins with the absence of mega deal wins brings uncertainty for double digit growth in FY26. Though guidance was revised upwards the ask rate for Q4 remains very low at minus 0.8 per cent, it said.
In the case of Wipro, the IT firm is expected to report a double digit rise in profit for the December quarter on flattish sales. It is expected to offer better outlook for Q4 with positive topline growth on account of improving deal pipeline and closure activities.
Nuvama sees net profit at Rs 2,967.80 crore, up 10.2 per cent. "We expect IT Services revenue to decline 0.6 per cent QoQ in CC and 1.3 per cent QoQ in dollar terms. Margins are expected to be lower by 50bp QoQ due to two months’ impact of wage hike. We expect Wipro to give revenue growth guidance of -1 per cent to +1 per cent CC QoQ for Q4FY25E," the brokerage said.
Nuvama said it would look for update on the Capco business and deal execution.
Prabhudas Lilladher sees profit at Rs 3,040 crore, up 12 per cent. It sees sales falling 0.7 per cent YoY to Rs 22,040 crore. Margin is seen at 16.1 per cent against 14.8 per cent YoY.
"We expect Wipro to report revenue declined of 1 per cent QoQ in CC and 2.1 per cent QoQ in dollar terms (currency headwind of 110 bps). Q3 performance of company will be impacted by furloughs in Capco, weakness in Manufacturing & client specific issues in ENU. We expect EBIT margin to decline by 50 bps QoQ due to 2 months wage hike impact & weak topline growth," it said.