After a blockbuster first quarter reported by Infosys last week, analysts expect other IT majors like TCS and Satyam to romp home with impressive quarterly figures.
TCS, the country's largest software exporter, is scheduled to release its April-June quarter results on Tuesday,
while Wipro and Satyam Computer would announce their Q1 earnings on July 19 and July 21, respectively.
While annual salary hikes and visa application costs tend to adversely impact the IT companies' June quarter results, a
sharp depreciation in rupee is likely to have helped their operating performance this year, analysts said.
Mitali B Ghosh of DSP Merrill Lynch said that IT sector's Q1 results are expected to be ahead of guidance, irrespective of being a seasonally weak quarter.
IT companies are likely to raise their annual guidance due to expectations of better volumes and rupee depreciation
versus the US dollar and British Pound, Ghosh added.
Infosys has already tweaked up its FY'07 guidance and the analysts expect other IT majors to follow suit while
announcing their April-June quarter results.
The margin pressure from salary hikes could be offset by improving mix of services, investments breaking even in new
services like BPOs and focus on productivity growth, Ghosh said.
After Infosys outperformed market expectations last week, analysts have become even more optimistic about TCS and Satyam also exceeding market expectations.
Man Financial's IT services analyst Nimesh Mistry said revenues are likely to have increased by 5 per cent to 11 per
cent in the sector, backed by strong volume growth and gains realised from rupee depreciation.
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