IT Services Sector Charging Ahead In Q4: Previews Prabhudas Lilladher
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Prabhudas Lilladher Report
We estimate revenue growth between 1.6%-4.3% QoQ constant currency (average 3%) for tier-I and 2%-4.4% QoQ constant currency (average 2.6%) for tier-II.
We believe IT services companies will post robust quarter led by -
- ramp up of large deals,
- strong pick up from Covid-19 hit verticals (travel and manufacturing),
- broad-based growth momentum and
- tailwinds from cloud transformation journey.
We expect operating margins to remain stable, as it can possibly get tailwinds from revenue growth, cost savings and offshoring.
In fact, for coming quarters it will decline a bit in coming quarters on account of wage hike and bonuses, but will comfortably remain 100-150 basis points higher than pre-Covid-19 levels in FY22.
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