Karvy Stock Broking expects Tata Consultancy Services (TCS) to out-perform on revenue growth at 7% QoQ and nearly touch USD 4 billion in quarterly revenue in 2QFY15 (USD 3,954 million), led by volume growth. This will be led partly by the completed acquisition of the Japan JV, which should add USD 100 million in revenue.
''Organic USD revenue growth is likely at 4.3% QoQ. Constant currency (CC) organic revenue growth is likely at 5% QoQ and CC total revenue growth is likely at 7.7% QoQ, with reported USD revenue growth to be lower by around 70bps due to dollar appreciation against the Euro, British Pound and Australian Dollar (cross-currency movements). We expect HCL Technologies (HCLT) to post the second-highest growth among the top-tier IT pack, at 3.3% QoQ (USD 1,454 million), with CC growth likely at 4% QoQ. We expect Infosys to post 2.8% QoQ reported USD reenue growth (USD 2,193 million) and 3.3% CC growth, while we expect Wipro to post slowest growth of 2.4% QoQ (USD 1,782 million) reported USD revenue growth (3.1% CC growth),'' it said.
''We will watch for commentary on sustenance of strong demand momentum going forward, critical in our view. We expect IT firms to maintain a healthy growth outlook for the year, aided by new technologies in the US, such as analytics and cloud, good traction in Europe, strong growth in run-the-business services and pick-up in discretionary spend. Deal wins have by and large remained strong, with Wipro's USD 1 billion deal win from Canadian energy and utilities player, ATCO a key highlight for the quarter,'' said Karvy Stock Broking.
''We expect ramp ups from these deals to sustain revenue growth momentum. We will also keep close watch on Infosys' growth strategy, expected to be articulated by its new CEO, Dr. Vishal Sikka, the first ever non-promoter CEO of the IT major. Regards stock views, we have a Hold rating on TCS owing to high valuation, while we retain our Buy ratings on HCLT, Wipro and Infosys,'' it added.
Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.