Recovery has been seen in IT sector stocks for some time now. Nifty IT index has increased by 16 percent in the September quarter, while since the beginning of June, the index has registered a gain of about 30 percent. This performance of the index has been better than the main index of the market. This performance of the IT sector has been seen after the expectations according to which the sector has reached its lowest levels and now recovery can be seen here. With these estimates, investors started buying stocks. Now investors are keeping an eye on the results of IT companies which will start being presented from this week. Investors want to see whether the first quarter business meets the expectations with which they have invested in the IT sector or not.
How can the quarterly results be- It is expected that with the help of recovery in the financial services vertical, the second quarter results can be similar to or better than the first quarter.
According to a CNBC TV18 poll, Infosys can register the fastest revenue growth of 3 percent on a quarter-on-quarter basis compared to other IT companies of its level. TCS can register a growth of 1.4 percent, Wipro 0.4 percent, HCLT 0.6 percent. Due to the weakness in the rupee and the implementation of salary hikes in LTIM, Infosys, HCL and Tech Mahindra in the third quarter, the margins of the second quarter can remain stable. It is expected that the management commentary will emphasize the cautious attitude of clients regarding expenses. The biggest indication in the results will come from the guidance, the market will see whether Infosys will increase its FY 2025 guidance by 1 to 3 percent. Revenue growth in the first quarter was 3.6 percent, while in the second quarter it was 3 percent, due to which the guidance is expected to be increased for the full year. Kotak estimates that the company can increase the current guidance from 3-4 percent to 4-5 percent. Citi estimates that the guidance can be 4-4.5 percent. CLSA has kept the guidance at 3-4 percent, although it said that if the guidance does not increase then it can be a negative sign. Apart from this, there is no expectation of any change in the margin of HCL Tech. On the other hand, Wipro's guidance can be negative 0.5 percent to 1.5 percent.
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