IT stares at slowest quarterly revenue growth in a decade
revenue expansion in a decade in the three months to December, although inherent client concentration and domain strength differences indicate a K-shaped growth path for the aggregate industry.
Seasonality and deal ramp-ups are likely to aid sequential constant currency revenue growth at HCLTech (6%), LTIMindtree (1.5%), and Tata Consultancy Services, or TCS, at 1.5%. By contrast, revenue declines are expected at Wipro (-2.5%), TechMahindra (-1.6%), and Infosys (-1.4%), brokerage firm Jefferies said, adding that it expects significant divergence in revenue growth across companies.
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Offering CollegeCourseWebsiteIndian School of BusinessISB Product ManagementVisitIIM KozhikodeIIMK Senior Management ProgrammeVisitIndian School of BusinessISB Professional Certificate in Product ManagementVisit The brokerage expects margins for Infosys and Wipro to contract by 120bps and 80bps respectively, affected by wage increases and revenue decline.
One basis point is a hundredth of a percentage point.
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The third-quarter results season will begin with TCS and Infosys announcing their results on January 11, followed by HCLTech and Wipro on January 12. The absence of large deal announcements during the quarter could also mean a muted deal total contract value (TCV) metric from the companies, said analysts.
The focus this quarter will be the commentary on the demand environment and 2024 budgets apart from contingency plans to deal with leadership churn in these companies.
“During Q3 FY24, we expect aggregate revenue growth for our coverage universe to remain muted at 0.8% QoQ (constant currency),
