IT Services Q3 Earnings Preview - Strong Revenue Momentum To Continue Despite Seasonality: ICICI Direct
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ICICI Direct Report
Normally, this quarter is seasonally weak due to furloughs. However, last year (Q3 FY21), we saw an aberration to this trend. Q3 FY22 is expected to be another strong quarter for IT companies after strong performance witnessed in Q2 FY22.
Growth momentum is expected to continue further with mid-caps outperforming tier-I companies. We expect companies to report healthy revenue growth in this quarter led by lower furloughs, ramp up of deals won in the previous quarters.
There would be some cross currency headwinds, which will dampen dollar revenues to some extent in the quarter. The companies are also seeing a demand tailwind in terms of investment in newer technologies like cloud transformation, artificial intelligence/machine learning, block chain, which further propel demand in coming quarters.
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