Little growth seen for TCS, Infosys in Q1

  • Reuters, Bangalore
  • |
  • Updated: Jul 11, 2012 22:49 IST

Uncertainty about spending by US and European clients in a weak global economy will likely weigh on the earnings of India's software giants Tata consultancy Services (TCS) and Infosys, analysts said on Wednesday. The domestic IT industry earns about three-quarters of its revenues from customers in the US and Europe.


Infosys is likely to pare its revenue growth estimate for the current fiscal year to as low as 5% when it posts quarterly earnings on Thursday, analysts said.

The company had in April forecast 8-10% growth for 2012-13, disappointing investors enough to cut 13% of its market value on the day. It has gained about 2% since.

Likewise, analysts expect TCS to report a sequential growth of 2.6% for the quarter.

"Hopes of a recovery are just that, hopes," said Apurva Shah, head of research at BNP Paribas Mutual Fund, which manages investments in top IT companies.

A weaker first half may have been factored in by the street, but "hopes for recovery are fading fast," said Bhavin Shah, chief executive of Equirus Securities.

 

also read

Infosys to hire 35,000 in FY'13

blog comments powered by Disqus