IT major Infosys is set to announce its first-quarter earnings on July 20. So far, its peers TCS, HCL Tech, and Wipro have reported and were seen having a softer outlook.

Ahead of results, here are the five key metrics to watch out for.

Revenue growth

Infosys revenue growth is likely to be in the range of 0.8-1.4 per cent, quarter-on-quarter (qoq) according to a poll of brokerages. BNP Paribas in a note said, “Impact of a slowdown related to cut in discretionary tech spending and weakness in BFSI and CMT verticals, will be seen.”

Margin and guidance

Brokerages expect EBIT margins to decline in the range of 25 – 36 bps. Margins’ headwinds for the quarter are higher variable compensations and provision for post-sales client support. Tailwinds are largely in the form of normalization after 90 bps impact in 4QFY23 due to revenue reversals, according to Kotak Institutional Equities.

Revenue guidance of 4-7 per cent is expected to be tightened to 4-6 per cent, if not the same.

Attrition and hiring

In Q4, attrition moderated to 20.9 per cent from 24.3 per cent in the preceding quarter. Its total employee headcount fell by 3,611 to 3,43,234. Attrition and headcount in Q1 should be watched out for given that the demand has slowed down and the company still has headroom to raise utilization levels. Infosys peers have seen significant headcount reduction in the first quarter.

Deals and conversion of pipeline

Infosys in the recent past has signed large deals, one being the $454 million Danske Bank deal and another with one of its existing clients to provide AI and automation service with a target spend of $2 billion. The deal pipeline and management commentary on the conversion of the said deals are to be watched out for.

Management commentary

Investors will be keen to watch the management’s commentary on the performance of impacted verticals such as BFSI, retail, hi-tech, and telecom, the impact of project cancellations and deferrals, if any, risk of macro headwinds on demand and demand outlook, large Deal wins, deal pipeline and investments in GenAI partnerships and solutions.

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