Most IT firms missed estimates; this is what pulled down IT industry’s Q1 earnings

Rising costs and falling realisations hit the Indian information technology industry hard in the last quarter, with almost all IT firms missing Q1 earnings expectations, barring Infosys, which barely met the street estimates, according to a report. While TCS and Infosys had robust revenue growth during the period, Wipro and Tech Mahindra saw a deceleration in growth. Increase in cost of visa applications pulled down earnings across the board, Kotak Institutional Equities said in the research report. Continued pressure on realisation; increase in subcontracting costs due to a shortage of visas in the US; a higher number of visa applications and certain large deal transition costs, were the major factors responsible for the slowdown in the IT industry in the last quarter, the report said.