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Analysts polled by CNBC-TV18 say seasonal decline in Comviva (USD17-18 million impact), some decline in BT revenue and the absence of any large deal ramp-ups may hurt top line.
IT major Wipro today announced a bleak set of Q1 numbers. In an interview to CNBC-TV18, sector analysts breakdown the results and what can be expected from the company in the days ahead.
Negative sentiment may have been already priced in as two other mid-cap companies Persistent and KPIT Technologies have also issued earnings warnings. Persistent had alerted investors that certain client specific issues could result in dollar revenue decline sequentially.
Tech Mahindra missed street forecast on Tuesday with the fourth quarter consolidated profit falling 39.2 percent sequentially to Rs 472 crore, dented by lower margin and higher forex loss.
In an interview to CNBC-TV18, Niraj Dalal, founding partner, 3A Capital Advisors says a lot of Nifty companies reported poor Q4 earnings and therefore, the market is currently factoring in a very pessimistic scenario for a couple of those stocks.
In an interview to CNBC-TV18, management of Tech Mahindra discusses company's performance in the fourth quarter.
One-off expense or extraordinary item could have cost the margins to decline so much, said Ravi Menon, Elara Capital in an interview with CNBC-TV18.
Analysts polled by CNBC-TV18 say margins may be lower by 250 basis points (bps) impacted by wage hike, acquisitions and currency. This can be partly offset by operating efficiency. Street focus will be on deal pipeline and FY2016 growth, and levers to defend margins.
IT major TCS is likely to set the tone for earnings this quarter. Cross currency headwinds remain major concern as the company had earlier indicated a 40 basis point impact on margins due to forex moves. Kawaljeet Saluja, ED and head of research, Kotak Institutional Equities speak on what to expect from the TCS earnings this evening.
Tech Mahindra management was upbeat about the road ahead and reiterated that they were on track to achieve their USD 5 dollar revenue target. Vineet Nayyar, Executive VC and CP Gurnani, MD & CEO spoke exclusively to CNBC-TV18‘s Kritika Saxena.
Sarabjit Kaur Nangra, VP - Research, Angel Broking said the numbers were broadly in line with expectations. She remains bullish on the stock with a longer-term perspective though in the near-term she sees little upside.
Software services exporter Tech Mahindra's third quarter profit is seen rising 11 percent sequentially to Rs 799 crore, according to the average of estimates of analysts polled by CNBC-TV18. Earnings will be announced on Friday.
While JM Financial is incrementally positive on Infosys stock, it will still wait for one or two more quarters of performance from the company before upgrading it to a buy.
The Tech Mahindra management said it was confident of its growth outlook going forward. “When you have logged performance like this in the last 12 months, we think good about the future and we think we will be able to deliver on a similar trajectory,†MD and CEO CP Gurnani said.
Consolidated total income from operations grew by 7.2 percent to Rs 5,488 crore in the quarter ended September 2014 compared to Rs 5,122 crore in June quarter while dollar revenue climbed 5.2 percent quarter-on-quarter to USD 900 million in the quarter gone by.
Dollar revenue may report a 3.83 percent sequential growth at USD 888 million during the quarter (constant currency growth may be 4.5 percent due to the consolidation of BASF IT services during the quarter).
Sales of Tech Mahindra are expected to increase by 1.6 percent Q-o-Q (up 32.1 percent Y-o-Y) to Rs 4847.2 crore, according to Motilal Oswal.
Revenues of Tech Mahindra are expected to increase by 1.9 percent Q-o-Q to Rs 4864.1 crore, according to Sushil Finance.
Dollar revenues are expected to be USD 777.3 million, a growth of 2.5 percent compared to previous quarter while rupee revenues may grow 0.8 percent to Rs 4,810 crore in the quarter gone by.
"We expect tier-1 IT aggregate growth to moderate to 3.2 per cent q-o-q, given seasonal impacts of lesser working days and year-end shutdowns/furloughs," Nomura Equity Research said in a report.
On the guidance for Q3, CP Gurnani, managing director and chief executive officer, Tech Mahindra says the quarter will be slower owing to the various number of holidays in Europe and US.
Revenues are seen going up by 13.7 percent quarter-on-quarter to Rs 4,666 crore in three-month period ended September 2013 while dollar revenues may grew 2.9 percent to USD 745 million, driven by deal ramp up and full integration of Complex IT.
Sales of Tech Mahindra are expected to increase by 13.4 percent Q-o-Q (up 32.1 percent Y-o-Y) to Rs 4,653.5 crore, according to Motilal Oswal.
Sales of Tech Mahindra are expected to increase by 13 percent Q-o-Q (up 32 percent Y-o-Y) to Rs 4,644 crore, according to KR Choksey.
Citi has maintained neutral rating on Tech Mahindra and upped target price to Rs 1,340 from Rs 1,120. "We have upgraded FY14-15 expected PAT by around 4-7 percent (buoyed by other income, deferment of wage hikes) and raised multiple slightly (11 times September FY14 expected EPS from 10 times)," Citi report said.