IT, Internet, BPO, KPO Q3 Preview - Higher Furloughs, Projects Cancellations To Weigh On Growth: Dolat Capital

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..Dolat Capital Report.We anticipate another subdued quarter with revenue growth of -2.1% to 4.3% QoQ in constant currency terms amongst our tier-I IT names, and 1% to 5.2% CC growth for tier-II names for Q3 FY24E, amidst delayed revenue conversion and muted demand environment.Ebit margins too, will be impacted, with higher than expected furloughs in hitech/banking, financial services and insurance putting additional pressure, hence we see QoQ movement of -150 basis points to 200 basis points in Q3 FY24E.Our interactions with industry participants indicate BFSI and communication, media and technology continue to reflect pain esp. in U.S. led by weak macro environment as pace of mega deal cancellations continues (for example Infosys Ltd. $1.5 billion; after Tata Consultancy Services Ltd. $2 billion with Transamerica in Q1).Our stance on slowdown in IT services remains intact for near term as deal wins remain muted and delayed revenue conversion to impact growth in Q3/Q4.However, IT stocks saw sharp up-move on expectations of rate-cuts, which we believe is unwarranted as any revival in demand for discretionary spend would have time-lag of couple of quarters atleast. Our preference is for large-caps, given lower risk to estimates/price earnings ratio..Click on the attachment to read the full report:.Jio Financial Services - Firing On Multiple Engines: KRChoksey Initiates Coverage With A 'Buy' Rating.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, Internet, BPO, KPO Q3 Preview - Higher Furloughs, Projects Cancellations To Weigh On Growth: Dolat Capital

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