Published on Fri, Jan 02, 2009 at 13:30 | Source : Moneycontrol.com
Updated at Fri, Jan 02, 2009 at 13:47
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IIFL negative on IT sector
IIFL remains negative on IT sector outlook. The research firm expects firms to miss their USD QoQ revenue guidance by 1-2ppt and Infosys and Satyam to cut FY09 revenue guidance by an equal amount.
IIFL remains negative on IT sector outlook. The research firm expects firms to miss their USD QoQ revenue guidance by 1-2ppt and Infosys and Satyam to cut FY09 revenue guidance by an equal amount.
IIFL's report on IT sector:
Demands for non-billing during the last 10 days of December, onsite cuts, significant (10%+) price cut requests and abrupt project cancellations have marred 3QFY09 (especially the latter half of December) and outlook for the quarters ahead. Further, cross-currency headwinds during the quarter have almost guaranteed that guidance misses and cuts are a reality. We expect firms to miss their USD QoQ revenue guidance by 1-2ppt and Infosys and Satyam to cut FY09 revenue guidance by an equal amount. Given the importance of FY09's CQGRs in propping up FY10 growth, likely revenue declines during 3Q and 4QFY09 would seriously dent an already-weak FY10. That said, despite the cross-currency headwinds, the 11% depreciation of the rupee vs USD should add 100bps+ QoQ to operating margins. We remain negative on the sector outlook.
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To read the full report click on the attachment......
