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The second quarter result season, which kicks off on October 12 with Infosys announcing its earnings, may see top IT companies benefit from a depreciating rupee with topline sequential growth expected to increase between 3.5 per cent and 6 per cent.
Speaking to Business Line , Mr Dipen Shah, Senior Vice-President (Private Client Group Research), Kotak Securities, said: “We are expecting 5.7 per cent growth from HCL. Infosys and TCS are both expected to grow at 4 per cent and Wipro at 3 per cent.”
Optimistic
Commenting on this growth, he said, “This should be decent enough. There will be no issues if they achieve this growth.”
Ms Srishti Anand, IT Analyst, Angel Broking, was more optimistic about Infosys than about Wipro. “We expect Infosys to grow by 4.9 per cent and Wipro by only two per cent because Wipro has already guided for a poor performance, including its SAIC acquisition,” she said.”
She said that HCL would offer the best performance of 6.1 per cent growth, followed by TCS with 5 per cent.
Mr Karthik Ananth, Director, Zinnov Management Consulting, said because of the depreciating rupee, many companies will report very good rupee revenues. “Europe and Middle East are also areas to watch. Companies that have traction with manufacturing and BFSI should report good Europe revenues,” he pointed out.
As a caution, he said that topline and bottomline alone were not areas of concern. “There has been high attrition, which has only now started to come down. I would like to see the attrition numbers for this quarter.”
But Ms Anand pointed out that the depreciating rupee would have impacted companies for only around 20 days in the July - September quarter.
Scope for growth
Mr Amneet Singh, Vice-President - Global Sourcing, Everest Group, said there was scope for good growth. “Cognizant, TCS and HCL should come in with strong performance. Wipro should show improvement given the recent organisation restructuring.”
Regarding Infosys, he said that he would prefer to wait and watch. “There is a certain sense of optimism given the recent leadership changes.”
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