With the result season already upon us and the IT bellwether Infosys which will report its fourth quarter earnings today after market hours is in focus.
Apurva Prasad, Research Analyst-IT at HDFC Securities and Karan Taurani, VP-Research at Dolat Capital share their expectations from Infosys Q4.
Prasad said Infosys has come out well from a crisis situation and expect them to give a 6-8 percent revenue guidance for FY19.
Taurani said being on the conservative side, Infosys will give a guidance below Nasscom average of 7-9 percent. In the fourth quarter Infosys performance could be slower than its peers, he said.
“Maybe H2FY19 could be stronger for the company because H2FY18 on a low base has not done well as of now,” said Turani. One can also expect a commentary from the new CEO on his strategy, deal pipeline etc, he said.
Prasad said Indian IT is at an inflexion point. The size of digital deals are significantly getting bigger and are now more value driven than volume driven earlier. “The overall deal pipeline is improving significantly for companies, while the pricing environment continues to be stable,” he added.
It would be 3-4 years before the industry could report double-digit growth, said Taurani.
Meanwhile, Prasad says double-digit growth for the sector could come in 2 years but the key for that would be digital deals.
In terms of pecking order, Taurani is upbeat on HCL Technologies and Tech Mahindra from largecap IT and from midcap it would be Persistent Systems and Mphasis on back of better growth strategy and margin improvement.
For Prasad, the pecking order is HCL Technologies and Infosys from largecaps and midcaps it would be L&T Infotech and L&T Technologies from a price appreciation at least 2-3 quarters point of view.