IT Services Q2 Earnings Preview - Topline Growth Strong, Lower Utilisation Impacts Margin: ICICI Direct
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ICICI Direct Report
IT companies are expected to continue their revenue growth momentum in Q2, which is a reflection of strong deal signing momentum.
We expect banking, financial services and insurance, retail, manufacturing, hi tech and life-science to drive revenues in the quarter.
On the currency side, we expect some headwinds from unfavorable cross currency movements.
Since demand continued to be strong in IT companies, the supply side crunch is expected to have an impact on margins.
Since companies accelerate fresher hirings to cater to increasing demand, utilisation of companies is expected to take some hit while subcontracting costs are expected to accelerate, which will have an impact on margins.
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