Revealed: Revenue loss estimations of IT companies

Chennai: A latest report has said the tier-I IT services companies are expected to report a 4-6 per cent quarter-on-quarter (qoq) revenue decline in US dollar, while tier-II IT companies may report a 4.5-8.1 per cent fall in their revenues in the June quarter.

The report by Emkay Global Financial Services says there could also be a pressure outlook on pricing from the next quarter as clients may ask for fewer ‘WFH’ (work from home) arrangements. It is also expected that given the situation, there could be more signs of offshore deliveries.

There could be inorganic growth on behalf of Indian IT companies that may try to take over captive centres of their clients.

There are also speculations if Indian IT services companies would reinstate their future guidance practice from the June quarter as they had refrained from providing revenue or margin guidance due to the uncertainty in the business environment.

The report added that in case Infosys and HCL Technologies do provide a formal outlook, they would expect a 2-4 per cent y-o-y revenue decline guidance for FY21.

A formal guidance would also signal that the companies are much more confident of client spending trends.

 

NT Bureau