TCS, Infosys, HCL Tech, IT sector Q1FY22 results preview: Strong revenue growth, lower margins, wage hike
Three of the top Indian IT companies — TCS, Infosys, and HCL Technologies — are expected to post a healthy set of numbers in the first quarter of FY22 earnings. Analysts see the IT sector continuing reporting strong momentum with accelerated hiring, faster revenue/earnings growth, and higher cash flow conversion. “IT companies will report further acceleration in on-year revenue growth trajectory with Infosys expected to lead the charge amongst the Tier I techs in terms of sequential revenue growth,” said analysts at JM Financial Institutional Securities. Also, despite a high base effect in the second half of FY21, analysts see a strong demand environment and expect deal wins to result in continued strength across large-cap and midcap IT companies.
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Analysts at Motilal Oswal Financial Services believe that recent commentary from industry peer Accenture points to a better than expected demand environment. Moreover, commentary with regard to FY22 to remain constructive, with firms maintaining their double-digit revenue growth guidance. “We also expect better clarity from companies like Infosys, HCL Technologies, and L&T Technology Services, which highlighted COVID-19 related uncertainty in their outlook in 4QFY21,” it added.