Software services provider Persistent Systems' second quarter profit is seen falling 7.8 percent sequentially to Rs 67.5 crore on weak operational performance, according to analysts polled by CNBC-TV18.
Revenue is likely to increase 3 percent quarter-on-quarter to Rs 723 crore and dollar revenue may grow 3.1 percent to USD 108 million in Q2.
EBITDA (earnings before interest, tax, depreciation and amortisation) is expected to fall 1.65 percent to Rs 104 crore and margin may contract 68 basis points to 14.38 percent compared with previous quarter due to wage hikes.
Wage hikes are expected to impact margins by 250-300 bps in Q2FY17 but the impact may be offset by absence of visa costs (benefit of around 100 bps) and improvement in onsite utilisation.
Persistent had guided for EBITDA margin in FY17 to be down around 200bps on a YoY basis from 18 percent in FY16. It had said cost associated with the IBM Watson IoT deal would be upfront and impacted margin by around 200 bps in FY17.
However, margin is likely to revert back to a normal range in FY18 once the investments in this business start yielding results, feel analysts.
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