IT firms may log muted growth in Q1, see 50-160 bps decline in margins

Margin growth in the absence of benefits from rupee depreciation will be a concern, say experts

Indian information technology (IT) services firms are expected to log muted growth in the April-June quarter (first quarter, or Q1) of 2019-20 (FY20), while profit margins are expected to shrink further.

Factors such as increasing visa costs, wage hikes, shortage of talent in key geographies, as well as transition costs associated with large deals, are expected to adversely impact revenue as well as profitability of the players in this segment.

Experts tracking the sector say that the top-tier IT services firms are expected see 50-160 basis points (bps) decline in their margins, while companies such as Tata Consultancy Services (TCS),