Tech margins to take a hit in Q2

Tata Consultancy Services (TCS) will kick off the earnings calendar on Monday as fears over a global recession get countered by analyst expectations of a resilient domestic economy.

The mixed sentiments are likely to get reflected in corporate India’s scorecard with consumer goods, automobiles and banks outperforming sectors such as metals, cement, and oil and gas.

Though India’s IT services firms earn a significant portion of their revenues from overseas markets, analysts remain optimistic about their performance during the July-September quarter, despite their margins taking a hit due to wage hikes. The focus, however, will be on the management commentary on aspects such as new deal wins, hiring and attrition.