IT to see demand revival in FY12, Infosys to shine in Q4: Experts
Wednesday, 13 April 2011, 07:45 IST
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New Delhi: After witnessing a sluggish fourth quarter, the IT industry is likely to see demand revival in FY12, say experts. "The quarter ending March is seasonally the weakest for the industry, as clients usually finalise their budget spends for the next year during this period," Motilal Ostwal Securities said in a note. However, analysts said that demand environment remains strong and pick-up in sequential growth rates will resume from first quarter of FY12. Among the IT companies, HCL Technology is expected to lag its peers due to higher exposure to Japan and ongoing BPO restructuring, say experts. Also, Wipro may continue to marginally lag peers for the next few quarters as the organisation settles under the new leadership, they added. For the fourth quarter of 2011, volume growth is likely to remain modest at 4.1-5.2 per cent q-o-q for Tier-I companies, due to ongoing IT spend by clients, along with reporting a decent performance on the EBIT margin front. Within technology, healthy top line growth is expected to be supported by strong demand and momentum in deal sign ups, Edelweiss Capital said in a note. "We expect sequential depreciation of 1 per cent in the Indian rupee to have a marginally positive impact on the IT company's margins this quarter," said one expert. Market players remained bullish on IT bellwether Infosys Technology, commenting that the sector would report earnings growth of 19 per cent, led largely by the IT major who is the first among its peers to announce the fourth quarter and year ended numbers on April 15, 2011. However, key risks for sector giants like TCS and Infosys remains currency volatility, macro uncertainties and increased attrition.
Source: PTI
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