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Mid-cap IT firms to see muted Apr-Jun earnings
By siliconindia
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Thursday, 10 July 2008, 18:07 IST
Mumbai: As a result of cutbacks, cancellations on projects and wariness in budget releases, especially by customers in the U.S. the mid-cap technology firms are expected to report flat to low sales growth in dollar terms for the April-June quarter from the previous quarter on subdued volumes, analysts said.
Edelweiss Securities in its sectoral preview on technology company earnings said "With signals from the U.S. confusing and continued uncertainty on the fate of some larger financial institutions, we believe that risks remain to back-ended growth."
According to Phaneesh Murthy, Chief Executive officer, iGate, volume growth is more likely to get affected than pricing. "We are not seeing as much of pricing getting affected in the market," he said.
However some companies have reported a sales growth in rupee terms due to the 6.8 percent depreciation in the Indian currency during the April-June quarter as crude oil soared.
Ruchir Desai, IT analyst with PINC Research observed that the top-line could benefit from the rupee depreciation to a certain extent, operating margins could rise by 10 percent or more because of the rupee weakness.
