All eyes would be on deal wins, as the IT major has been suggesting a very strong deal pipeline of late, said analysts, who believe investors would also focus on 5G spending outlook and comments on offshore mix and subcontracting expenses.
JM Financial expects the IT major to report a 59.4 per cent YoY surge in profit at Rs 1,281.60 crore compared with a Rs 803.90 crore profit reported for the year-ago quarter. On a sequential basis, the bottom line is projected to slip 2.2 per cent. Revenues are seen rising 3.9 per cent YoY (2.2 per cent QoQ) to Rs 9,859.40 crore. In dollar terms, revenue is projected to rise 6.5 per cent YoY and 3.2 per cent sequentially.
“We are building in a 2.5 per cent sequential constant currency growth, with 70 bps cross-currency tailwinds. EBIT margins are expected to be flat sequentially due to lack of headwinds amid wage increments,” JM Financial said.
Emkay Global sees profit rising 52.9 per cent YoY (down 6.1 QoQ) to Rs 1,229.40 crore. Ebitda margin is seen expanding 520 basis points to 19.4 per cent over 14.2 per cent in the year-ago quarter. On a sequential basis, Ebitda margin may fell 25 basis points over 19.6 per cent.
“We expect 3 per cent QoQ growth in dollar revenue with cross currency benefits of 80 bps. We expect broadly similar sequential growth in the communications and enterprise business. We expect EBIT margins to decline 40 bps sequentially,” it said.
ICICIdirect said Tech Mahindra may see 3 per cent sequential growth in dollar revenue led by a healthy traction in the communication and enterprise segments and cross-currency tailwind.
“However, due to rupee appreciation, rupee revenue is expected to grow 1.8 per cent QoQ. We expect EBIT margin to increase 35 bps QoQ due to synergies in portfolio companies, automation, reduction of subcontracting cost, higher offshoring and pruning of low return geographies. PAT is expected to increase 2.8 per cent QoQ,” it said.
ICICIdirect said the deal pipeline in telecommunication and enterprise segment, quantum of wage hikes, rampup of Telefonica deal, opportunities in 5G, margin improvement in portfolio companies and long-term growth opportunity would be the key things to watch in today’s earnings announcement.
