Infosys Q2 results preview: Will the results provide oomph to surging IT stocks?
Infosys pursued an acquisition in a quarterly results development.
· Economic Times Markets, ET Stocks
Infosys is set to report an 11% rise in year-on-year revenues and an 8% increase in net profits. However, the company may lower its full-year revenue outlook due to declining discretionary spending and mounting pricing challenges. Analysts foresee sequential revenue growth driven by acquisitions and enhanced operating margins.
The analysis
Infosys reported movement of 8% and 11%. Those are the figures as filed — what moves the price is how they sit against what the market already expected, not their absolute size.
Against that, the stock is -1.1% on the day at ₹1,155.30, and has returned +8.8% over three months. It sits 32% below its 52-week high, which means a good deal of bad news was already in the price. The it sector has moved +3.9% over the same period, so Infosys is running 4.9 points ahead of its peers.
For Infosys, the question is how much of this is already reflected in the price and how much re-rates the it peer set alongside it.
Why it matters
- Earnings versus expectations is what actually re-rates a stock; the surprise matters more than the absolute number.
Market context
- The company directly in focus is INFY.
- Sector exposure: IT.
In this story
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