Infosys' CEO Sikka speaks during a news conference at company's headquarters in Bangalore
"It gives us scalability, it gives us isolation and accountability of individuals," said Vishal Sikka, Infosys CEO on breaking down company into smaller business units. In Picture: Infosys' CEO Sikka speaks during a news conference at company's headquarters in Bangalore.Reuters

Infosys's profit is expected to drop by 2.7 percent to ₹3,161 crore in the fourth quarter of 2014-15, compared to the December quarter, owing to poor operational performance and sluggish revenue growth, according to a CNBC-TV18 poll.

The company's revenues in rupee-denominated terms are likely to increase to ₹13,818 crore during the January-March quarter, up 0.15 percent sequentially.

Infosys reported a revenue growth of 2.6 percent in the third quarter ending December 2014, helped by growth in all verticals and new client additions.

Although the company's derives two-thirds of revenue in US dollar, analysts expect investments and cross currency effects to have weighed on its margins.

Markets are eagerly awaiting the announcement of the company's earning results, even as it struggles to consolidate its position in an increasingly competitive environment. 

Breaking its convention of kick-starting the earnings season, India's second largest software services firm postponed its results announcement to 24 April without citing any reason.

However, analysts say that chief executive officer Vishal Sikka is seeking more time to finalize the roadmap needed to restructure Infosys into a next-generation service company.

The $8.2 billion (2013-14 revenues) IT services company is likely to come out with new metrics to measure the progress of the revival strategy initiated by the Sikka who took charge in August 2014.

Revenue Guidance a Key Focus

Investors' focus is likely to be on the company's FY16 revenue growth guidance. 

Analysts expect the company's 2015-16 revenues to grow at 9-11 percent in constant currency, as against industry body Nasscom's estimate of 12-14 percent growth.

The dollar revenues of the company are likely to grow by 6-8 percent in FY16, taking into 300 basis points currency impact.

The quarterly results of the country's other large IT firms released so far have revealed that cross fluctuations had an adverse impact on their revenues. Cross currency movements have been hurting the revenues of software firms for the past two quarters, as a strong dollar hits their income earned through exports.

Missing analysts' estimates for the third straight quarter, dollar-denominated revenues of India's largest software firm TCS declined by 0.8 percent to $3,900 million in the January-March quarter, while in rupee terms it fell by 1.1 per cent to ₹24,219.8 crore.

HCL's net profit declined to ₹1,683 crore in the January-March quarter, down 12.2 percent from the October-December quarter.

Shares May See Sell-off on Results

Following the sell-off seen in shares of Tata Consultancy Services (TCS), Wipro and HCL Technologies post the announcement of results, Infosys shares are also expected to come under similar pressure if earnings disappoint analysts' expectations.

"Infosys can't be an exception, on a disappointing result, to this norm. However, as the negative sentiment in this sector already resulted in price damage, further aggressive sharp downward bets can't be expected unless Infosys delivers very poor of results or results below expectations," says Mazhar Mohammad, Chief Strategist, Technical Research & Trading Advisory,, told The Economic Times.

However, many brokerage firms advise investors to buy Infosys stock on declines as they remain confident on prospects for the company's growth, from a long-term perspective.

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