IT firms may see gradual recovery in Q3

IT services companies are projected to see a gradual recovery in the October-December quarter, driven by stronger demand in the banking, financial services, and insurance (BFSI) sector, as well as a reduction in project cancellations, shorter furlough periods, and easing macroeconomic uncertainties.

While growth is expected to remain modest on a sequential basis, the outlook for individual companies and total contract value (TCV) is notably better than the previous year, according to analysts.

Also ReadBudget 2025: Deloitte says FM Sitharaman should focus on boosting retail consumption

The key drivers of recovery include increasing digital investments in financial services, continued adoption of cloud and data services, and the resolution of uncertainties surrounding elections in developed markets. According to Kotak Institutional Equities, “Furloughs during the December quarter are significantly lower than last year, supporting growth momentum”.

Also Read Simplilearn cuts losses by 56 per cent on marginal revenue growth in FY24 FMCG firms seek respite in 2025 Accenture’s Q1 earnings signal turnaround for IT firms amid market challenges Demand a worry for consumer goods: Can Q3 offer hopes of revival

Mid-tier firms such as Coforge and Persistent Systems are poised to lead the growth trajectory with sequential revenue increases of 4.7%, while HCLTech is expected to post a solid 4.4% rise. However, industry majors like TCS and Infosys are anticipated to report much slower growth, with rates dipping below 1%. LTIMindtree, despite challenges in the hi-tech vertical, is expected to show stable growth, on the back of its diversified portfolio. Analysts point to the BFSI sector’s robust performance as a bright spot, though they caution that other verticals remain uncertain.

“Momentum in BFSI is strong, but we are less confident about growth in non-financial segments,” noted industry analysts.

The depreciation of the rupee against the dollar during Q3 is expected to provide a slight boost to IT companies, as the majority of their revenue comes from the US. However, analysts warn that the currency volatility could introduce margin fluctuations, complicating financial assessments. Deal activity, however, remains moderate. While TCV figures have slowed, largely due to a decline in mega-deals, there are positive signs in annual contract value (ACV) figures, which reflect steady progress in ongoing projects. Infosys is expected to report large-deal TCVs of around $3 billion,

 » Read More

Related Articles

8th Pay Commission: Central govt to merge pay scales for Level 1-6 employees? Here’s what the new proposal says

8th Pay Commission: The National Council of Joint Consultative Machinery (JCM) Staff Side has submitted its recommendations for the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), advocating significant changes in pay structure, allowances and benefits for government employees. Among the key points of ToR is the proposal for merger of certain

Bharti Airtel Q3 Results: Profit surges 505.24% to Rs 14,781.20 crore, ARPU at Rs 245

Bharti Airtel on Thursday posted a profit of Rs 14,781.20 crore during the third quarter of FY25, reporting a growth of 505.24 per cent in comparison to Rs 2442.20 crore during the corresponding quarter of FY24. The telecom major recorded Q3 revenue from operations at Rs 45,129.30 crore, up 19.08 per cent as against Rs

JB Pharma is riding the CDMO Opportunity. Jefferies reiterates buy…

Jefferies has maintained a Buy on JB Pharma with a revised target price of Rs 2,310. The stock currently trades at Rs 1,714/share implying an 34% upside. This new target price is just a shade lower than the previous target price of Rs 2,340. According to Jefferies, an international brokerage house, the growth drivers are

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
0FollowersFollow
0SubscribersSubscribe
- Advertisement -

Latest Articles

8th Pay Commission: Central govt to merge pay scales for Level 1-6 employees? Here’s what the new proposal says

8th Pay Commission: The National Council of Joint Consultative Machinery (JCM) Staff Side has submitted its recommendations for the Terms of Reference (ToR) for the 8th Central Pay Commission (CPC), advocating significant changes in pay structure, allowances and benefits for government employees. Among the key points of ToR is the proposal for merger of certain

Bharti Airtel Q3 Results: Profit surges 505.24% to Rs 14,781.20 crore, ARPU at Rs 245

Bharti Airtel on Thursday posted a profit of Rs 14,781.20 crore during the third quarter of FY25, reporting a growth of 505.24 per cent in comparison to Rs 2442.20 crore during the corresponding quarter of FY24. The telecom major recorded Q3 revenue from operations at Rs 45,129.30 crore, up 19.08 per cent as against Rs

JB Pharma is riding the CDMO Opportunity. Jefferies reiterates buy…

Jefferies has maintained a Buy on JB Pharma with a revised target price of Rs 2,310. The stock currently trades at Rs 1,714/share implying an 34% upside. This new target price is just a shade lower than the previous target price of Rs 2,340. According to Jefferies, an international brokerage house, the growth drivers are

Two banking stocks to watch ahead of the RBI Policy

By Kiran Jani Bank Nifty reached its all-time high of 54,467 in September 2024. Following this peak, the index experienced a correction, dipping to 47,844 in January 2025—a decline of 7.29%. Despite this pullback, Kotak Bank and ICICI Bank showed relative resilience, delivering returns of 1.61% and -4.20%, respectively, during the same period. Source: Investing.com

New Tax Regime: These deductions, exemptions still available for you

The Indian government introduced a new tax regime in 2020, offering lower tax rates while removing several exemptions and deductions available under the old system. Initially optional, this regime became the default in 2023, requiring taxpayers to opt out if they wished to continue under the old structure. Despite the removal of many benefits, certain