India Infoline says IT Q2 FY09 Preview: ‘Unexciting Quarter’

Infosys Technologies LimitedImage via WikipediaImage via Wikipedia
Q2 FY09 is unlikely to spring up any major surprises either positive or negative. Therefore, the upcoming IT result season would likely be a non-event with respect to stock performance. We think Q2 FY09 would not bear the brunt of the recent bankruptcies/nationalization/acquisition of the various large BFSI companies in the US. As these unfortunate events unfolded only towards the end of quarter, we suspect any critical business impact only from Q3 FY09. In Q2 FY09, we expect modest US$ growth (2-5% qoq) but strong rupee growth (5.5-9.5% qoq) in revenues due to the sharp rupee depreciation. Operating margin is likely to improve materially for most companies except for those who have implemented salary hikes (Satyam, HCL Tech and Wipro). We expect Infosys and TCS to lead Q2 FY09 performance with double-digit operating profit and earnings growth.  
Source: India Infoline Resea rch
Click here for a detail note on the same.
It is a clear warning for us. We should not be carried away with the present quarterly results of IT companies. Stay away from IT companies Till March for any fresh exposure.

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