The one bright star in a bleak year for IT
Bloomberg poll of analysts, showed the Noida-headquartered company may grow revenues by 4.7% in FY24, the best by a large-cap firm in India's $253-billion IT services industry. In comparison, Tata Consultancy Services (TCS), India’s largest IT services firm by market value, could end the year with a slightly slower revenue growth of close to 4%, driven by what Nomura and HDFC Securities project could be a 1.5% sequential growth in dollar revenue in the March quarter. TCS’s revenue growth in the quarter could be driven by a digital transformation deal it won from state-run telecom operator Bharat Sanchar Nigam Ltd.
Meanwhile, Infosys, the second-largest in the IT industry, may report a marginal decline in revenue in the March quarter, and 2% year-on-year increase in FY24. Wipro, meanwhile, would be the only one among the top four Indian IT firms to see a decline, with a flat March quarter projected to lead to 3.7-4.1% lower FY24 revenue. HCL is expected to be the best performer among the top four, while others are projected to post either flat revenue for the quarter ended 31 March, or report sequential declines.
TCS is expected to kick off the FY24 annual earnings season next week, when it announces its results on 12 April. Infosys, Wipro and HCL report earnings on 18, 19 and 26 April, respectively. Analysts said the IT sector's overall tepid performance could be attributed to the delay in discretionary tech spending.
Abhishek Bhandari, executive director of equity research at Nomura, said the IT services industry presently has no signs of discretionary demand revival. “Indian IT services companies are likely to see some respite from weak seasonality and furloughs of the December quarter (of FY24). However, in the
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