Q2FY19 preview: IT firms to report higher sequential EBIT margin on Re fall

The top five IT firms are likely to post 1 per cent to +2 per cent QoQ growth in US dollar revenue (0.5 per cent - 3.3 per cent QoQ in CC terms), with TCS likely to lead the pack.

We expect the IT firms under our coverage universe to post a combined 1.5 per cent QoQ growth in US dollar revenue in 2QFY19. Reported US dollar revenue is likely to be adversely affected owing to the strengthening of the US dollar against major currencies including euro, GBP (British pound) and Australian dollar (2-4 per cent QoQ appreciation on quarterly average rate).

We expect 50-130 bps adverse impact of cross-currencies in 2QFY19E. The top five IT firms are likely to post 1 per cent to +2 per cent QoQ growth in US dollar revenue (0.5 per cent - 3.3 per