IT Q2 Results Preview - Slightly Better With Green Shoots In Financial Services, Healthcare: ICICI Securities

ICICI Securities Report

IT sector may have slightly better Q2 FY25 earnings as we see-

1. increased momentum of hyper-scaler growth (AWS/Azure/GC);

2. strong growth from North America after a lull; and

3. momentum in healthcare.

The factors leading to the positive turn of events include:

1. Increased momentum in AI, leading to higher demand for hyperscalers, semiconductors;

2. investment in digitisation due to technical debt accumulation post a period of solely prioritising cost optimisation;

3. green shoots in US BFS, and healthcare (indicated in our top client heat map analysis).

It may be mixed for retail, manufacturing. We expect Q2 FY25 to fare slightly better versus Q1, led by the aforementioned tailwinds. Margins may be better QoQ given the absence of wage hikes for most.

Upgrade Mphasis to Add (from Sell). Prefer Persistent Systems for industry-leading growth and anticipated turnaround in hi-tech vertical. Remain bullish on Tata Technologies.

Click on the attachment to read the full report:

DISCLAIMER

This 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.