IT Services Q4 Results Preview - Weak Macro To Weigh On Earnings Growth: Motilal Oswal

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..Motilal Oswal Report.We estimate U.S. dollar revenue/ Indian rupee Ebit/ Indian rupee profit after tax to grow at 8.4%/15.9%/11.2% YoY in Q4 FY23E for our IT Services coverage universe which implies FY23E USD revenue/ Indian rupee Ebit/ Indian rupee PAT growth of 10.6%/11.4%/7.8% respectively. Our IT services coverage universe is expected to deliver a median revenue growth of 0.8% QoQ and 9.2% YoY in constant currency terms in Q4 FY23. Major currencies appreciated against USD (euro up 5.2% and £ up 3.8%), which will provide tailwinds. Ebit/PAT are expected to grow by 1.2%/3.0% QoQ, due to weak topline growth. While the banking, financial services and insurance sector has been resilient for the last few quarters, recent industry developments have added to caution on its tech spending. Though the Indian IT services firms do not have meaningful exposure to the affected U.S. regional banks, fears of a banking crisis is expected to impact near-term IT spending by banks and will be the key monitorable during the management commentary.Apart from BFSI, hi-tech, manufacturing and retail are also muted in Q4. Clients have started to cut discretionary spend while increasing focus on cost efficiency work. IT services companies are seeing a shift to cost optimisation deals, along with increased vendor consolidation deals in the pipeline..Click on the attachment to read the full report:.Infosys, Wipro Q4 Preview - No Change In Relative Positioning Despite Worsening Macros: 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 - Weak Macro To Weigh On Earnings Growth: Motilal Oswal

Expect muted revenue growth; margin likely to expand on easing supply.

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