IT Services Q4 Results Preview - Turn Around Expectations In H2 FY24, Is There Visibility? Nirmal Bang

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. .Nirmal Bang Report.That Q4 FY23 is likely to be a weak quarter was telegraphed by most companies during Q3 FY23 results. We are building in very modest revenue growth in constant currency terms due to the decent total contract value clocked by many in previous quarters and the narrative of ‘delayed/no landing’ that had been building up on the U.S. macro in late CY22 and early CY23 (before banking problems arose in both U.S./Europe in March 2023). While further deterioration of the banking problems has been stemmed, we need to watch out for any collateral damage to the economies affected by the crisis and impact on customer health (something we highlighted in our recent sector update). Incrementally, we believe that customer health, which had been broadly deteriorating through much of CY22, would have turned weaker post these events. We continue to hold on to our below consensus 3-5% CC revenue growth for tier-I IT companies for FY24 - a view we have held since July 2022. We expect margin improvement for most coverage companies QoQ due to pyramid benefits, cross currency tailwinds, higher utilisation (with possible shedding of employees on a net basis), easing of backfilling costs as attrition eases, lower sub-con costs, etc. This would be somewhat offset by lack of operating leverage, higher travel costs, elevated sales and marketing spends, likely pricing pressure and transition costs for some of the cost optimisation/vendor consolidation deals..Click on the attachment to read the full report:.IT Services Q4 Preview - Weak Sequential Growth Already Factored In Recent Valuation Cuts: ICICI Securities.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 Results Preview - Turn Around Expectations In H2 FY24, Is There Visibility? Nirmal Bang

That Q4 FY23 is likely to be a weak quarter was telegraphed by most companies during Q3 FY23 results.

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