Q4FY22 Result Preview - Information Technology - ICICI Direct

The growth of Indian IT companies is expected to moderate in Q4FY22 as witnessed in Q4 quarters historically. Margins are expected to take a hit due to continued higher employee expenses. The demand environment continued to be strong led by continued deal momentum led by sectors like BFSI, insurance etc. There would be some cross currency headwinds during the quarter, which will dampen dollar revenues, to some extent, for the quarter. The companies continue to see a demand tailwind (recent Accenture commentary and outlook suggests that) in terms of investment in newer technologies like cloud transformation (as per Accenture commentary, only 30% of applications has been migrated to cloud, suggests long tail of cloud transformation ahead), AI/ML, block chain (as per CB insights, US$25 billion (bn) have been already invested by blockchain companies in CY21), which is expected to further propel demand in coming quarters. In terms of margins, we expect them to decline (barring Coforge that is expected to post QoQ margin expansion due to better performance of advantage GO, high margin business) since supply side headwinds would put pressure on margins.

For details, click on the link below: Link to the report

Source : Equity Bulls

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InformationTechnology ITSector Q4FY22 ResultsPreview ICICIDirect