IT Sector: Q4FY21 preview- A robust fourth quarter in offing

The Q4FY21 results of Indian IT services companies are likely to reinforce our “Bottom of tech upcycle” thesis expounded in the Techolution series. Not only that, we expect the results to surprise again all over — higher guidance, better-than-expected margins and upbeat outlook. Meanwhile, Street would have to catch up with estimates revisions.

We argue Indian IT companies are poised to turn in a robust Q4 driven by: (i) highest-ever order books; (ii) substantial revenue acceleration; (iii) robust margins; and (iv) strong outlook. We like all IT stocks in our coverage.

Cloud and Digital overarching themes: We believe a substantial shift from offline to online activities has accelerated the adoption of Cloud and Digital.