July 9, 2012
V. Ganesh
India’s IT stars often enjoy a boom during the first quarter, but not this year, as
firms continue to endure the slowdown while outsourcers dawdle on decisions regarding tech spends.
Infosys, along with TCS, will be the first to report the numbers for the first quarter.
Revenue guidance
Analysts expect Infosys to pare the revenue guidance further for the FY13 in the range of 7-9% compared to the 8-10% it had predicted at the end of FY12.
Wipro had given guidance of a flat growth for the first quarter of FY13 and analysts expect it grow 1% over the previous quarter.
“We expect 2012 revenue growth to be in the mid-to-high teens compared with the 20% plus growth in 2011,” said Sreenivasa Prasanna, Senior Director at ratings firm Fitch.
“In what has generally been a strong growth quarter, we expect Infosys and Wipro to report muted revenue growth,” said Pankaj Kapoor andApoorva Oza, analysts at Standard Chartered.
The macroeconomic conditions in both the US and Europe will continue to haunt Indian IT companies in the coming period, according to analysts.
“With continued elongation in decision cycles and no signs of macro recovery on the horizon, there is little to suggest that companies could surprise positively,” said Ashish Chopra, Analyst at Motilal Oswal.
Hiring activity (or the lack thereof)
The wariness is causing affected firms to put off hiring IT engineers, which will benefit employers who are actively seeking new talent.
“After Infosys deferred campus joiners by a couple of quarters, hiring activity and guidance across players will be keenly watched,” said Mr Chopra.
Analysts predict TCS and HCL Technologies are expected to grow 4% over the previous quarter.
“TCS and HCL are likely to be the outliers, helped by ramp-ups in large projects they have bagged,” said Standard Chartered analysts.
TCS bagged a $2.2-billion deal for 15 years with Friends Life and HCL has won a few billion dollar deals.
The Tinderbox Daily 