Infosys, Wipro, TCS, HCL Tech Q3FY21 Results Preview: IT Sector (Coverage Universe) to Record Strongest Third Quarter Growth in the Last Eight Years Despite Seasonal Factors and Unstable Macro Situations It is set. After QoQ growth (rebound) of 6% in Q2, 3Q is expected to print 3.7% QoQ in this sector. In 2010, it will be a double-digit stage.
The main driving factors are as follows.
(1) Acceleration of cloud consumption and migration to the cloud caused by a pandemic (workload migration and modernization)
(2) Vendor and application portfolio integration by enterprise clients driven by cost optimization and leading to multiple large badge reissues
(3) Improving partner ecosystem / alliances and continuity in strong execution despite operational movement and readjustment
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Leverage in the third quarter was flat (+ 240bpsQoQ in the second quarter followed by -30bpsQoQ), wage increases (TCS, Wipro, Persistent Systems, others in the fourth and first quarters), large transactions Cost, offsetting the impact of operating leverage, favorable cross-currency.
Large-scale trading momentum continues to be strong, with third-quarter trading TCV (Total Contract Value) figures for TCS (PBS-Deutsche, Prudential, Equinor), Infosys (Daimler, Rolls Royce), Wipro (Metro AG, Fortum). ), LTI is expected to be strong. (Injazat), and Mindtree (Nordex). M & A strength (volume term) accelerated in the third quarter with nine acquisitions. Winning trades in the periodic ER & D segment (LTTS-Schindler, O & G sector trades, Tata Elxsi-Aesculap AG) are also on a recovery track. Other positive demand indicators from Accenture’s recent update include strong booking continuity and the outlook for acceleration in the second half of 2009.
Important points to monitor:
(1) Explanation of CY21 client technology budget
(2) Large-scale transactions, overall transaction reservations, and progress / regression of the transaction pipeline
(3) Industry-specific performance range and core industry outlook – BFSI, retail, CPG
(4) Large-scale trading trends (closed timeline, profitability) and digital price trends
(5) Outlook for ER & D (education, research, dissemination) services by industry
(6) Reverse lookup of DSO (Digital Storage Oscilloscope) as a temporary discount and stance of capital allocation (increased amount of M & A activity in the third quarter).
The main risks are:
1) Possibility of macro recovery
2) Unfavorable USD-INR swing.
HDFC Securities rolls the rating forward to the Dec-22E, and their recommended choices include Infosys, HCL Tech, Mphasis, and Persistent systems.
Infosys, Wipro, TCS, HCL Tech Q3FY21 Results Preview: IT Sector Starts 2021 with High "Double Digit" Notes
https://www.zeebiz.com/market-news/news-infosys-wipro-tcs-hcl-tech-q3fy21-results-preview-it-sector-to-start-2021-on-a-high-double-digit-note-145173 Infosys, Wipro, TCS, HCL Tech Q3FY21 Results Preview: IT Sector Starts 2021 with High "Double Digit" Notes