IT Services Q4 Preview - Weak Sequential Growth Already Factored In Recent Valuation Cuts: ICICI Securities

BQ Prime’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 BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.IT companies under our coverage, ahead of their silent period, have mentioned increased cautiousness among clients around decision-making due to heightened uncertainty arising from the recent banking crisis. Deal pipelines have not shrunk, but conversion to new deal wins is taking longer time. Also, in certain cases, conversion of orderbook to revenues in terms of deal ramp-ups is taking longer than usual. This, in our view, implies rightshifting/postponement of demand to H2 FY24E or even FY25E as digitalisation agenda of clients remains largely intact, but their near-term focus has shifted to cost optimisation and increasing efficiency. Although our covered companies’ exposure to U.S. regional banks is at best in low-mid single digits of overall revenues, the overall exposure to banking, financial services and insurance vertical is quite significant. This might lead to a decline in sequential revenue growth this quarter. Due to cross-currency tailwinds of 100-150 bps during the quarter as major currencies like British pound sterling, euro, Japanese yen appreciated against the greenback, U.S. dollar revenue growth of companies under our coverage would be higher than CC revenue growth..Click on the attachment to read the full report:.IT Services Q4 Results Preview - Banking Crisis To Weigh Upon Near Term Growth: IDBI Capital.DISCLAIMERThis report is authored by an external party. BQ Prime 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 BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

IT Services Q4 Preview - Weak Sequential Growth Already Factored In Recent Valuation Cuts: ICICI Securities

Recent events in global banking are impacting decision-making cycles; we expect weak sequential growth in Q4 FY23E.

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