Key Points
In its note, Motilal Oswal said, "Our IT Services coverage universe is expected to deliver a weak median revenue growth of 0.4% QoQ and 5.3% YoY in 1QFY24..
However, Motilal's note added, "We expect EBIT/PAT to decline 1.8% each QoQ, due to weak topline growth and the impact of wage hikes..
Consequently, barring a few companies, HSBC's note added, "growth is likely to be -2 to +1% q-o-q in 1Q, which for a seasonally strong quarter is weak and could potentially put FY24 revenue estimates at risk. 2Q outlook and deal wins in 1Q will be key data to track.".
For the large-cap universe, Kumar Rakesh analyst at BNP Paribas said, "We expect 1QFY24 revenue growth of 1.3-2.4% q-q cc (except WPRO: -1.2%, TECHM: -2%) and margin contraction of 8-63bp q-q (except LTIM: 79bp expansion), largely on muted revenue growth, wage hikes, visa costs, and seasonality.".
Meanwhile, IDBI Capital in its note said, "For Q1FY24E we expect large caps to register dollar revenue in the range of flat to -2% QoQ trend aided by 0-60 bps cross currency tailwind..
