The quarter usually sees higher billing days and an uptick in spending after budget allocation. This time would be no different, as suggested by global peer Accenture’s recent revised guidance and strong quarterly set of numbers.
All eyes would be on attrition, digital business outlook, management commentaries on steps taken to manage supply-side challenges and available levers to defend margins, analysts said.
Sales growth
Among the top tier companies, Kotak Securities expect to log a sequential growth 4.5 per cent, followed by TCS (3.7 per cent in constant currency terms), and Wipro (3.1 per cent on an organic basis, 9.4 per cent on reported numbers including Capco and Eximius Design acquisitions).
Tech Mahindra is seen clocking 2.3 per cent revenue growth which would include 1.5 per cent growth organically.
, meanwhile, is seen reporting a muted 1 per cent. On YoY basis, revenue growth is likely in 9.3-19.2 per cent on a low June 2020 base and a strong rebound in subsequent quarters.
Bottomlines & margins
On the bottom-line front, expects all five companies to report double-digit profit growth on YoY basis. But Wipro’s numbers could be down sequentially.
TCS is seen reporting profit at Rs 9,292.30 crore, up 0.5 per cent QoQ (up 32.6 per cent YoY). Infosys could report Rs 5,432.60 crore in profit, it said, up 7 per cent QoQ (up 28.3 per cent YoY). Wipro is seen reporting a sequential 6.3 per cent drop (up 16.6 per cent YoY) in profit at Rs 2,786 crore. HCL Technologies’ profit is seen at Rs 3,255.80 crore, up 36.4 per cent QoQ or 11.4 per cent YoY. TechM’s profit is seen rising 6.3 per cent QoQ and 18.2 per cent YoY to Rs 1,149.20 crore.
Ebit margin for the five companies is seen in the 15-25.4 per cent range.
Guidance
expects a double-digit revenue growth guidance from most IT firms for FY22. In the case, Infosys, the brokerage said that the Street is already ahead of the guided revenue growth band of 12-14 per cent YoY. Accordingly, the absence of a meaningful upgrade could be disappointing. HCL Tech is seen firming up its growth guidance band. Wipro may guide for 2-4 per cent organic revenue growth for September quarter in constant currency terms.
“Given the margin pressures industry is going through currently, an upgrade in margin guidance, outlook by any company is unlikely, in our view,” ICICI Securities said.
