IT companies to see improved revenues this quarter: ICICI Securities

IT companies may show improved revenues this quarter due to digital technology traction. A report by ICICI Securities says IT companies are expected to witness a healthy improvement in revenues on a QoQ basis mainly led by ramp up of past deal wins, traction in digital technologies and easing of supply side pressure. According to the report, Tier-1 IT companies may see a revenue growth in the range of 1- 3.5% in constant currency terms, and a cross currency tailwind of ~100-140 bps will further positively impact dollar revenue growth.

“Among tier 1 HCL Tech, Infosys are expected to see dollar revenue growth of 4.8%, 4.7%, respectively. Tata Consultancy Services (TCS), Wipro are expected to witness dollar revenue growth of 3.8%, 2.4%, respectively,” says ICICI Securities.

The companies are seeing a demand tailwind in terms of cost takeout by clients (led by higher offshoring & automation), vendor consolidation opportunities and traction in cloud & customer experience.