After profit warning by HCL Technologies, analysts scaled down their expectations for July-September quarter. They expect revenue growth in Q1FY16 to be lowest among peers.
Dollar revenue is seen rising 0.9 percent sequentially to USD 1551.5 million froms USD 1537.5 million, according to average of estimates of analysts polled by CNBC-TV18.The company, follows July-June as its financial year, will announce its earnings on October 19.
On September 30, the IT services provider gave a revenue warning saying revenue growth is likely to be tepid on account of adverse currency impact (impact of 80 basis points on dollar revenue), client specific issue (provision of USD 20 million) and skewness in revenue growth due to transition timelines for complex engagements particularly in infrastructure services.
After this warning, analysts scaled down dollar revenue growth forecast to 0.9 percent from around 3-3.5 percent earlier.
Rupee revenue may increase 3.4 percent quarter-on-quarter to Rs 10,110 crore but profit may fall 2.4 percent to Rs 1,740 crore in the quarter ended September 2015.
On sequential basis, earnings before interest and tax (EBIT) may climb 5.7 percent to Rs 1,975 crore but margin may decline 70 basis points to 19.5 percent due to the client specific charge of USD 20 million and partial wage hike.
Analysts say the company has incurred cost on this project, but will not recognise revenue. Hence, it is likely to cause margin headwind around 1.3 percent. According to them, this would mark the third consecutive quarter when company earnings estimates have been cut. Earnings cuts in the last two quarters were driven more by margin contraction.
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