Rating- attractive; IT services- Digital spending to continue in long term
时间:2024-06-26 08:22:10 阅读(143)
TCS and InfosyS both reported earnings with two common factors, though Infosys was a bigger surprise compared to TCS. These factors include a decline in demand from North America, with some discretionary programmes being put on hold or cancelled, as well as challenges in flexing margin levers due to sticky near-term costs at the start of a slowdown. While we acknowledge the heightened headwinds that may affect multiples in the near term, our long-term perspective on margins and growth remains unchanged. Stocks to avoid are the ones trading at premium multiples after assuming elevated growth and margin assumptions. The slowdown was sharper than expected. Infosys and TCS reported q-o-q revenue declines of 3.8% and 0.8%, respectively, in North America. The revenue decline in North America was across verticals on a sequential basis. The reasons for the decline were a pause in discretionary programmes and even cancellations. After a slow start in January, projects were paused in February and it continued in March.
The banking crisis in US regional banks and European banks in March 2023 has induced greater caution and could impact the June quarter. Kotak expects FY24 to remain weak for IT firms.
Also read: 2023 the likely end of conventional and dawn of new creator economy?
In response, companies may pursue cost optimisation measures, including opportunities related to cloud and SaaS consumption. TCS and Infosys are best positioned. HCLT and LTIM can benefit in select cases. Similar cost take-out opportunities, but among smaller enterprises may be addressable by a larger pool of companies. Many other companies will struggle—growth between leaders and laggards should widen in FY2024 and beyond.
上一篇:Delhi’s path to sustainable growth- Govt unveils plan for eco-friendly industrial hub in Rani Khera
猜你喜欢
- Delhivery IPO subscribed 21% on first day of offer
- Dreamfolks Services’ IPO to open on August 24; price band fixed at Rs 308-326 per share
- Sensex, Nifty end in red, IT and Metal laggards amid weak global market; investors eye RBI for further cues
- Sensex extends fall to the third day, Nifty may continue moving sideway till US Fed meet, support around 15600
- Sensex declines 78 points on profit taking in IT, banking shares, weak Asian cues
- Diwali 2023- Festival of lights comes knocking! India shines with colours and lights to celebrate – See Pictures
- Sensex, Nifty rise for 5th day in a row; financial shares advance on RBI policy decision
- Petrol and diesel price July 1- Fuel rates remain steady; Check prices in Delhi, Mumbai, other cities here
- Paradeep Phosphates Rs 1,500-crore IPO opens today; should you subscribe- Here’s what brokerages say