Infosys has in the last few quarters surprised with quarterly numbers, either beating expectations or disappointing expectations. The stock has been one of the most volatile on the day of its results and Friday Jan 9, 2015 may witness a similar episode.
The best way to have avoided volatility would have been to declare numbers after market hours as company's like Reliance and TCS do.
What would Infosys Q3 2014-15 numbers be like?
The quarter ending Dec is traditionally a weak quarter for software companies because of the holiday season. It's likely to be the same for Infosys.
Analysts hint that there could be a drop of between half and one per cent in the margins of the company.
Among the biggest challenges for Infosys would be the cross currency concerns. This is one reason why the dollar revenue could see a small growth of one per cent.
On a constant currency basis one could expect the revenue growth to be around 2-3 per cent.
"Given a seasonally weak quarter and severe cross-currency headwinds, USD revenues of top-tier Indian vendors are hit by a double whammy in the December quarter," Deutsche Bank analyst Aniruddha Bhosale said in a note on 2 January.
Future Guidance and Strategy Key to Stock
One of the most eagerly awaited pieces of information with regards to the Infosys stock would be the guidance. Revenue guidance and future outlook would remain key to the stock's performance.
Most analysts expect the company to continue to maintain its revenue guidance of 7-9 per cent for even the next year.
Key strategies to be implemented by Vishal Sikka and his commentary on the outlook would be crucial. Analysts would also watch out for attrition rate and see if Vishal Sikka has managed to boost employee morale and reduce attrition rates.
It's likely to be a muted performance for Infosys. In the past the stock has fallen or gained anywhere between 7-20 per cent on the day of the results.
Unlike the past, positions built-up in the Infosys have not been too large. Even as we write the stock is up just about 0.5 per cent, even as the market is up over one per cent.
This clearly hints that there are no huge positions that are being built around the Infosys stock a day ahead of its results. All in all, expect less volatility and muted expectations this time around.