IT firms to report strong Q1 results: Analysts

Domestic IT companies are expected to come out with a decent set of Q1 results led by strong growth by Infosys, Satyam and TCS in the quarter ended June 30, 2006.

IT bellwether Infosys is scheduled to kick-start the earnings season for the sector with its first quarter results on June 12 while Wipro and Satyam would announce their results later next week.

Besides robust growth in revenue and earnings, IT companies are also likely to report strong employee additions for the quarter, ICICI Securities' software analyst Shekhar Singh said.

While the results had been hardly in line with expectations in the March quarter, strong guidance figures for FY07 and improving IT spending trends across the domestic and global markets indicate improved performance for the June quarter, analysts said.

Infosys had announced a strong guidance of 30% revenue growth and 26-28%net profit growth for the current fiscal year.

"We expect strong performances from Infosys, Satyam and TCS while HCL Technologies may disappoint marginally," Singh said. The three companies are estimated to report revenue growth of 9-11% over the previous quarter, he added.

Karvy Stock Broking said in a report that most of the Tier-1 IT companies are likely to report revenue growth of 7-10% with the exception of TCS. Both Infosys and Satyam are expected to suprise the market with Q1 revenues ahead of their guidance figures, ICICI Securities said.