KRChoksey: IT Sector Q2 FY21 Post Earnings Review -Resilience, A Key Theme Across-The-Board Amid Pandemic Impact
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Revenue for the IT firms under our coverage rose 3-7% QoQ in U.S. dollar terms (1-7% QoQ rise in constant currency terms), with most companies’ revenue ahead of our estimates led by a rapid rebound in client IT spend, mainly towards digital transformation initiatives particularly movement of workloads to cloud, a trend that seems to have gotten accelerated by the Covid-19 pandemic.
Ebit margin performance for IT firms in our coverage universe was impressive, with all bar Wipro Ltd. clocking better-than-expected performance (100-440 basis points QoQ margin improvement), while for Wipro there was a marginal 14 basis points QoQ improvement.
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