HCL Tech, Wipro may outperform Infosys, TCS in Q4: Nomura

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India’s biggest outsourcers Infosys and Tata Consultancy Services forecast soft growth in the March quarter. Infosys dollar revenues are likely to fall 0.4 per cent sequentially in the March quarter, while TCS is expected to report 2 per cent quarter-on-quarter growth (in constant currency terms) lower than 2.1 per cent q-q growth in the December quarter.
Nomura says HCL Tech, Wipro and Tech Mahindra could outperform Infosys and TCS in the March quarter.
HCL Tech is likely to report 3.2 per cent sequential growth in the March quarter, the brokerage says, citing strong deal signings in the last four quarters.
“Management outlook remains positive on both Infrastructure Management Services and core software, with no vertical specific weakness highlighted except in telecom,” Nomura said.
Wipro’s dollar revenue growth is likely to be 3 per cent sequentially, Nomura says. The company had guided for 1.8-3.6 per cent sequential growth in fourth quarter. The company continues to see strong traction in India and is not highlighting any vertical specific issues, Nomura says.
Nomura expects Tech Mahindra to grow at 3.3 per cent sequentially in the March quarter on account of, 1) deal signings of $1billion plus over the last three quarters; 2) strong traction at top clients ex of British Telecom;) 3) Comviva typically has a stronger second half, which should offset the decline from cessation of BT-related restructuring revenue in fourth quarter.