Also Read: Will chatbots eat India's IT industry? The operating margin was flat QoQ for the IT sector at 19.7%. The deal TCV during the quarter was strong at $27 billion, up 33% QoQ.
Median Book-to-Bill (BTB) remains elevated at 1.2x for the sector, however the revenue conversion remains a challenge. “The spending reprioritization to core areas and broad-based cost-takeout theme continued through Q4, while project ramp-down or deal cancellations have been more pronounced for few companies at the onset of macro uncertainties," said the brokerage firm.
The revenue growth outlook for FY25 has been discouraging with Tier-1 companies expected to report below mid-single digit growth on average, while Tier-2 companies are capping their revenue growth to high-single digits. “Unlike in FY24, companies have become more conservative in FY25 projections, and are baking in anticipated delays in executions and project closure activities.
However, if the spending recovery coexists with an anticipated macro recovery in the near-term, then we might see an upward revision to the estimates for the companies as they progress through the year," Prabhudas Lilladher analysts Pritesh Thakkar and Sujay Chavan said. Also Read: IT sector recovery hopes pushed back to FY26; stock valuations attractive after recent correction, says Kotak Equities Within Tier-1, TCS has relatively outperformed the peers and reported +1.1% QoQ CC revenue growth, while HCL Technologies reported +0.3% QoQ CC over a high base in Q3.
On the other side, Infosys has been the outlier and reported another quarter of decline at 2.2% CC QoQ versus a decline of 1.0% CC reported in Q3. The demand environment remains unchanged in 4Q with large global enterprises continue to stay
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