The performance of Q4FY13 was softer-than-expected, with weaker-than-expected performance from Infosys and Wipro but in-line performance from TCS and HCL Tech. The steady growth from Europe indicates increased acceptance of outsourcing model and stability with the existing clients.
''We continue to expect the demand environment to show steady rather than sharp recovery. We retain our preference for Wipro and Infosys as low running expectation and valuations leave room for a positive surprise,'' Prabhudas Lilladher said.
TCS continues to lead the growth, indicating confidence of beating NASSCOM guidance with 14%+ YoY growth. Infosys guided for 6-10% YoY growth and sees no material change in the environment. However, Infosys' management was very assertive for the guidance. It sees a change in confidence level in the management's commentary for the guidance.
The pricing for the quarter was softer compared to the previous quarter. However, its channel check indicates most of the pricing pressure is behind. "We may see movement in realization due to change in the business mix as the discretionary spend continues to remain weak."
According to the management of Cognizant, the clients may lobby against some of the provisions in the bill at the appropriate time (introduced in the Congress for the discussion). Moreover, the company is neither seeing any push-back from its clients nor delay in decision-making due to the bill, it added.
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