According to stock market experts, IT companies are expected to deliver muted numbers due to macroeconomic headwinds and looming recession fears. So, the focus will be largely on their guidance as they expect a better business outlook for Indian IT majors.
Q3 results 2024: A preview of IT majors
Speaking on the expectations from Indian IT companies’ performance during the October to December 2023 quarter, Sonam Srivastava, Founder and Fund Manager at Wright Research said, “The Q3 results for the IT sector are anticipated to reflect a period of muted growth, largely due to global macroeconomic headwinds, and looming recession fears. But guidance is expected to be positive for the next quarter with North America and the UK showing promising pickup. Revenue growth across the sector is expected to be flat or slightly positive, though some companies might experience a decline. Profit margins are likely to face pressure from factors like wage hikes, cost overruns, and currency fluctuations.”
On what she is expecting from Indian IT majors in this Q3 results season, Sonam Srivastava said, “Specifically, for major players like TCS, Infosys, Tech Mahindra, and Wipro, the outlook varies. TCS has already reported a 3.2% YoY revenue growth and a 6.6% YoY profit growth in Q3, despite a slight decline in EBIT margins and a strong order book. Infosys, set to report its results, is expected to show flattish revenue growth and a 7.6% YoY drop in profit. Tech Mahindra and Wipro are also due to release their results, with analysts predicting subdued growth for Tech Mahindra and a potential revenue decline for Wipro. However, Wipro might see some margin improvement due to cost-cutting measures.”
Srivastava said that overall, the IT sector’s stock performance in Q3 might experience short-term volatility due to these mixed earnings reports and global economic uncertainty, but the long-term outlook remains positive, driven by ongoing digital transformation trends, cloud adoption, and resilience in technology spending and the second half of calendar 2023 could be quite exciting for IT.
Speaking on expected TCS Q3 results, Dhruv Mudaraddi, Research Analyst at StoxBox said, “We expect Infosys’ Q3FY24 revenue to marginally decline QoQ owing to a challenging quarter primarily influenced by sustained weak demand, absence of certain one-time sales and the impact of furloughs. The absence of mega deals is expected to moderate deal momentum in 3Q. EBIT margins are also anticipated to decrease slightly QoQ, attributed to the impact of two months of wage hikes in the quarter and the absence of one-time sales in 2Q, partially offset by lower pass-through sales and currency benefits. Further, we would be looking out for comments on the demand outlook in the BFSI and Hi-Tech verticals (currently under pressure), feedback on its clients’ CY24 budget, deal ramp-up visibility, and margin levers.”
Speaking on TCS results 2024, Amit Goel, Co-Founder and Chief Global Strategist at Pace 360 said, “Our projections suggest a 0.70% quarter-on-quarter (QoQ) rise in revenue, expected to reach ₹60,100 crore from the previous ₹59,692 crore. We anticipate a 2% increase in operating profit to ₹14,787 crore, up from ₹14,483 crore in the prior quarter. The bottom line could see a 2.14% QoQ increase in profit after tax, estimated at ₹11,624 crore compared to the previous ₹11,380 crore.”
Expecrted Wipro Q3 results 2023
On expected Wipro Q3 results 2024, Dhruv Mudaraddi, Research Analyst at StoxBox said, “We expect Wipro’s Q3FY24 revenue to decline in low single digits QoQ due to a lower services income owing to weakness in BFSI and Hi-tech verticals, along with challenges in the consulting business. Margins in the services business are expected to decline slightly, with the impact of a one-month wage hike and furloughs being offset by operational efficiencies. Overall EBIT margins are also expected to dip marginally, attributed to soft sales performance and the impact of wage hikes effective from December 1, 2023. on the size and nature of large deals in the quarter, margin levers, any signs of stabilization in discretionary project ramp-downs, and the impact of attrition among senior leadership.”
Market expectations from HCL Technologies Q3 results 2024
Speaking on the expected earnings numbers from HCL Technologies during the October to December 2023 quarter, Amit Goel of Pace 360 said, “We believe that the company’s revenue is poised to rise by 5.25% on QoQ basis, reaching ₹28,075 crore, showcasing steady growth from the previous ₹26,672 crore. Our optimistic outlook extends to the company’s operational performance, with the expectation of a robust 6.73% increase in operating profit on a QoQ basis, projecting it to reach ₹5,250 crore compared to the prior quarter’s ₹4,919 crore. In terms of the bottom line, we foresee a promising 7.5% QoQ increase in profit after tax, with an estimated figure of ₹4,118 crore, as opposed to the previous ₹3,832 crore.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decision.
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Published: 11 Jan 2024, 11:22 AM IST
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
