Cross currency headwinds of 150-220 bps will add to the usual seasonal Dec weakness resulting in a 0.6-2.9%QoQ USD revenue growth for Tier I companies with TCS at the lower end and TechM at the upper end, said Emkay Global Financial Services.
''Amongst Tier II companies, Persistent and Hexaware are expected to report strong revenue performance (+5% /3% QoQ). eClerx and Mindtree which reported strong revenue performance in Sep'14 quarter will report modest revenue growth in Dec'14,'' said Emkay.
''Operating margins are expected to inch up sequentially across most of the companies aided by 2.3% QoQ INR depreciation against US$ except for HCL Tech, Hexaware (on wage hikes hits) and First source (ramp downs on large projects),'' it added
''Currency reset to Rs 63/USD for FY16/17 drive raise in EPS estimates for coverage barring eClerx. While we retain our preference for Tier I's, we upgrade Hexaware to ACCUM, TP Rs 230 as we back upsides to earnings aided by strong operating performance,'' it opined.
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