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India IT Services Q3 Earnings Preview - Strong Performance In Seasonally Weak Quarter: Reliance Securities

India IT Services Q3 Earnings Preview - Strong Performance In Seasonally Weak Quarter: Reliance Securities

An image of an Index curve overlays a trader typing on a keyboard on the trading floor. (Photographer: Alex Kraus/Bloomberg)
An image of an Index curve overlays a trader typing on a keyboard on the trading floor. (Photographer: Alex Kraus/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Reliance Securities Report

In Q3 FY22, the Nifty IT Index outperformed by 12% (CY2021 outperformance of 30%) to Nifty. We expect a continued strong revenue momentum on the back of deal ramp-ups, IT transformational spends and sustained deal closure activity across our IT coverage universe.

We expect rising pressure on Ebit margin due to higher incentives for employees, wage hike to retain talent amid the high attrition, lower utilisation due to aggressive fresh hiring, and stable selling, general and administrative cost.

Recently, Accenture Plc. reported 21% YoY U.S. dollar revenue growth in its outsourcing services business, which we believe is a key positive for the Indian IT names.

Looking ahead, we expect the deal environment to remain robust backed by consistent technology spend on digital services by the global enterprises.

Click on the attachment to read the full report:

Reliance Securities India IT Services Q3FY22 Earnings Preview.pdf

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