Analysts expect IT firms to post modest growth in Q4

Printer Print Email Email
New Delhi: The top software exporting firms are likely to post modest growth in their fourth quarter earnings on the back of increased overseas demand, according to analysts. However, a strong rupee and hikes in wages could impact the profit margins of the technology companies, reports PTI. "Revenue growth is likely to be 3-5 percent range in US dollar terms. Pricing may see modest rise, however, there may not be any earnings upgrade," brokerage firm Edelweiss said. An analysis of earnings forecast by brokerages show the Indian IT firms would post an average growth of 4-5.5 percent in the fourth quarter earning, with Infosys, TCS and Wipro leading the charge. However, HCL Technologies and Patni Computers could post a sluggish volume growth, ICICI Securities said in a note. According to the brokerages, the year-on-year performance would be robust, although sequentially there could be muted growth in revenue. "We expect Q4 FY 2010 to be one of the strongest quarters for IT sector and we feel that the large caps would lead the pack in posting volume growth," Unicon Financial said in its note. During the January-March quarter, the domestic currency appreciated 1.6 percent over the previous quarter against the U.S. dollar. During the fiscal (2009-10) the rupee has risen 11.58 percent against the greenback. However, rupee appreciation could dent their Q4 earnings as well in the future as a majority of the IT firm's revenues are dependent on exports.

siliconindia