IT Results Preview - Healthy Q1 Expected; Focus Shifts To Operating Margin Sustenance: Dolat Capital
Employees walk along a path through gardens at the Infosys Ltd. campus in the Electronics City information technology hub in Bengaluru, India. (Photographer: Karen Dias/Bloomberg)

IT Results Preview - Healthy Q1 Expected; Focus Shifts To Operating Margin Sustenance: Dolat Capital

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.

Dolat Capital Report

As indicated in the FY22 guidance and strong deal wins in FY21, Indian IT services vendors are likely to witness organic revenue growth of ~2.3%- 4.1% QoQ in constant currency terms for Q4FY21 (reported revenue growth for Coforge Ltd. and Wipro Ltd. is expected to be at 11.1% and 9.6% QoQ including inorganic component).

Growth will be led by ramp up of deal wins from H2FY21 and consolidation of acquisitions for some players. Growth commentary is likely to stay strong as evident from strong order bookings.

Profitability for the quarter is likely to decline for most names in our coverage, as they face wage hikes impact and strong incremental lateral hiring impact (as utilisation levels are unsustainable). Expect some gradual normalization of discretionary/growth spends.

Click on the attachment to read the full report:

Dolat Q1 IT Preview July 6.pdf


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