Infosys will release its second-quarter earnings on Friday and is expected to report dollar revenue growth of around 2.8 percent. In the constant currency term, Infosys is likely to see growth of 3.5 percent aided by the acquisition.

Margins are expected to expand by about 100 bps on lower expenses related to wage hike and visa cost. For Infosys, there is a partial element of wage hike this quarter and that could push up profits by about 5.5 percent.

The key will be their FY20 guidance. It is likely to be up by 50 bps at around 8.5 percent to 10 percent. Guidance is likely to now become 9-10.5 percent but the consensus expectations already stand at 10.5 percent.

This means that even if Infosys increases guidance, it is quite likely analysts will not do a revenue upgrade. But Infosys could disappoint the Street if it does not give a hike in guidance. On the margins, the guidance is likely to be maintained at 21-23 percent.

The key to track will be deal wins given the macro uncertainty, the outlook on BFSI and retail and the attrition, which is very high for Infosys. The stock has been an outperformer. On a year-to-date basis, it has outperformed the Nifty, it has outperformed its peers and it has rallied about 20 percent.

First Published:Oct 11, 2019 9:28 AM IST