Infosys may beat TCS earnings even with lower deal wins in September quarter

• Analysts expect Infosys to upgrade FY22 growth guidance to 16%-18% from 14%-16% earlier.
• The company is expected to report revenue growth between 5.7%-6.2% in the September quarter.
• Large deals including Daimler and Roll Royce in the past will continue to ramp up revenue for Infosys.

The September quarter earnings for Infosys is expected to be bigger and better with its sustained deal momentum and continued contributions from some of its largest deals like Daimler last year. All this may lead to Infosys raising the growth guidance for FY22 to 16%-18% from current 14%-16%, said broking firm Phillip Capital.

Most analysts expect Infosys to report revenue growth around 6% for the September quarter compared to the previous quarter.

Revenue forecast by brokerages	% QoQ in constant currency
Phillip Capital	5.80%
HSBC	6.20%
IIFL Securities	6%
Emkay Global	6.20%
Motilal Oswal	5.70%

Analysts at Goldman Sachs expect Infosys to be the fastest growing large cap information technology (IT) company in financial year 2022. “Infosys’ early investment in building a sales and marketing team to stitch together large digital deals and focus on cloud platforms is creating industry-leading deal win momentum (last twelve months deal wins are up 86% year-on-year with contributions from several large deals including Daimler and Roll Royce),” said the report.

An IIFL Securities report said that revenue growth will be led by continued ramp up of large deals won earlier, including Daimler.

Although Infosys only has half the deal wins between Jul-Sep as compared to TCS, analysts have high expectations from it because of continuing revenue from large deals in the past.

New deals signed in second quarter

Client name	Vertical
Santander UK	BFSI
Union Bank of Philippines	BFSI
UCAS	Education
Manitoba Public Insurance	BFSI
BankDhofar	BFSI
Ausgrid	Energy & Utilities
Frost Bank	BFSO

Analysts have set expectations for a 25% more upside in Infosys stock. “While valuations are stretched for the sector, we continue to like Infosys and TCS on the back of their digital revenue leadership, cloud based solutions and sector relative attractive valuation,” said a report by Goldman Sachs.

Brokerages	Target price
Emkay Global	₹1,900
IIFL Securities	₹2,050
Motilal Oswal	₹1,890
Goldman Sachs	₹2,117
Phillip Capital	₹1,980
HSBC	₹2,025

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