Infosys, in the December quarter, reported a better-than-expected net profit of Rs. 3,708 crore but the outsourcer tweaked its guidance for the full year. Meanwhile, India's biggest outsourcer TCS reported a net profit of Rs. 6,778 crore in October to December quarter, in-line with the market's estimates.
Analysts at IDBI Capital Markets expect the IT sector to continue to face headwinds from muted global macros, risks of adverse visa rules in the US and transition of existing business to new technologies.
For Infosys, IDBI Capital Market & Securities expect constant currency (CC) revenue growth of 7-10 per cent and earnings before income and tax (EBIT) margin of 25 per cent.
"For Q4FY17, we forecast constant currency (CC) organic growth to remain soft as generally in Q4. M&A would aid growth and so would cross-currency movement. We forecast HCL Technologies to outperform with US dollar revenue growth of 4.3 per cent (QoQ).
We forecast Tata Consultancy Services (TCS) to continue with its excellent profitability management and expect it to be only company to see improvement in EBIT margin," says IDBI Capital Market & Securities in a research report.