IT Q1 Results Preview - Expect Status Quo On Demand Commentary: Nirmal Bang

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Nirmal Bang Report.After a 410 basis points outperformance by Nifty IT against Nifty in 2023, it has underperformed by 910 bps year-to-date although it has recovered 630bps on MTD basis. Elevated PE multiples of tier-I and tier-II IT players are either a sign that there is an earnings upgrade cycle in the offing for FY25/FY26 and/or that flows into equities are strong. We think FY25 consensus earnings still likely have a modest downside and a strong pick-up in FY26 is already factored in..We believe Q1 FY25 will be a decent quarter and with growth QoQ for nine out of 11 coverage companies. The post quarter commentary on demand conditions for FY25 will be the highlight. We think that it will remain the same as in the previous two quarters. Consensus (including us) is building in a modestly better FY25 versus FY24 on the back of strong order inflow in FY24 and expectation of a spending pick-up in H2 FY25..After nine months of downward revisions in revenue growth and EPS by consensus, we now expect modest downward revisions in H2 FY25. All players are likely to hold on to their revenue and margin guidance (if publicly put out) as of now. The H2 FY25 rebound hope is at risk due to: U.S. interest rates remaining higher for longer,Expectations of dramatic changes in economic policies post US elections in Nov. 2024 – especially around tariffs if Donald Trump wins. The announcement on large deal wins by Indian IT players have been relatively muted since September 2023..We persist with our ‘Underweight’ stance on the IT sector as we believe that we are in a ‘slower for longer’ demand environment and the risk is for current consensus estimates to be cut rather than raised..Click on the attachment to read the full report:.ICICI Bank - Well Poised To Sustain Best-In-Class Performance: Motilal Oswal.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

IT Q1 Results Preview - Expect Status Quo On Demand Commentary: Nirmal Bang

The announcement on large deal wins by Indian IT players have been relatively muted since September 2023.

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