Cross currency tailwinds to drive strong dollar revenue growth in non-US, Continental Europe and UK focused IT plays, such as TCS, Tech Mahindra, Mastek, KPIT,. Median US$ growth tailwinds in Top six and Midcap IT being ~200 bps and ~120bps respectively.
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Anand Rathi Report
Within Top-six IT names, Infosys and LTIMindtree are expected to show ~70 bps and ~130 bps sequential cc revenue growth, with cc-degrowth in the others. HCLTech to show seasonal de-growth of ~60bp, while TCS may witness ~2% cc sequential decline on the back of tapering of the BSNL account
Within midcap IT names, Persistent and Latent View are expected to report strong sequential cc growth of ~3.5% and ~3% respectively, driven by growth in their BFSI and Hi-tech verticals followed by First Source and Happiest Minds with ~2.3% and ~2% cc growth.
L&T Technology Services and KPIT are expected to witness (2.6)% and (3.5)% sequential cc decline, on the back of European OEMs facing stiff competition from Chinese OEMs, constraining their EV transition and R&D spend propensity coupled with tariff related uncertainty. Moreover, SWC seasonality to also weigh on L&T Tech growth in Q1 FY26.
Birlasoft expected to show ~(1.5)% cc-degrowth, with lower margins driven by operating deleverage, given exposure to manufacturing (~60% directly and indirectly, including med-tech dominated healthcare segment) & non-recurring discretionary spend.
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