IT, Internet, Software, KPO Q2 Preview - Positive Seasonality, Rupee Depreciation To Expand OPM: 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.For Q2 FY25, we anticipate revenue growth of +0.6% to +2.5% QoQ in constant currency terms amongst tier-I IT companies and +2.3% to +4.5% CC growth for tier-II companies, primarily driven strong seasonality in the quarter. Ebit margin is expected to expand sequentially for most IT companies (barring Coforge/HCLTech/Kpit Technologies with wage hikes) due to operating efficiencies and rupee depreciation. OPM is expected to see QoQ movement of -160 bps to +90 bps in Q2 FY25E. Our interactions with industry participants indicate banking, financial services and insurance vertical is seeing an uptick and driving the growth momentum. It is important to highlight that most IT services firms are witnessing an increase in headcount, although this growth is not substantial. In Q1 FY25, lead indicators such as TCV growth, employee additions, BFSI growth suggested slower recovery. Nevertheless, we will carefully watch-out for any uptick in key lead indicators in Q2 such as-Headcount additions (Naukri IT Services Sep-24 Job speak index up 6% QoQ), Furloughs and Client budgeting impact for Q3 andCommentary on recovery in discretionary spend. .At present, we maintain a ‘Neutral’ stance and prefer large caps given lower risk to estimates/valuations..Click on the attachment to read the full report:.IT Services Q2 Results Preview - Gradual Recovery On Path: IDBI Capital.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, Software, KPO Q2 Preview - Positive Seasonality, Rupee Depreciation To Expand OPM: Dolat Capital

The brokerage currently remains ‘Neutral’ on overall IT sector and remain selective with preference for LTIMindtee, Mphasis and within software, internet continue to like Nucleus, Paytm, Indiamart.

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IT, Internet, Software, KPO Q2 Preview - Positive Seasonality, Rupee Depreciation To Expand OPM: Dolat Capital

The brokerage currently remains ‘Neutral’ on overall IT sector and remain selective with preference for LTIMindtee, Mphasis and within software, internet continue to like Nucleus, Paytm, Indiamart.

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