Key Points
Given the bottoming out of revenue growth rate, brokerage house Nomura anticipates the end of the earnings per share (EPS) downgrade cycle for the IT sector...
The brokerage's top picks in the space are Infosys, Wipro, and TechM among largecaps, and Coforge and Birlasoft among midcaps..
Amongst large caps, we expect the strongest revenue growth at +2.5 percent QoQ (in constant currency or cc terms) for Infosys and the weakest at -2 percent QoQ in cc terms from HCL Tech..
As per the brokerage, Infosys' 2.5 percent constant currency (cc) growth, was driven by the ramp-up of large deals and the elimination of a one-time 100 basis points (bp) impact from restructuring a BFSI client contract. Strong seasonal trends are also expected to contribute to this growth..
Nomura also expects Infosys to maintain its FY25F revenue growth guidance of 1-3 percent in cc..
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