We expect a relatively subdued performance from the companies under our coverage with volumes for the Top 4 companies are expected to rise by 1% - 3%. Cross-currency fluctuations will likely impact USD revenue growth by about 0.5% - 0.7%. Margins are expected to improve QoQ, largely on the back of rupee depreciation. This is despite salary increments (select cases) and higher visa charges. For the companies under our coverage, we expect a 6% revenue growth in INR terms (helped by rupee depreciation) and a near 7% rise in EBIDTA. PAT growth is seen lower at 3.7% because of forex losses (hedging) and higher taxes in some cases.
We understand that, the overall demand scenario has remained stable over the quarter. We believe that, while the economies of USA and EU may take long to improve, the stimulus measures taken by them have eased concerns of catastrophic defaults / bankruptcies and helped them stabilise. This may prevent demand from falling in the foreseeable future. However, there is considerable unease over the proposed Immigration Bill in USA, which may weigh on the sector. We maintain our constructive view on the medium-to-long term prospects of the sector on expectations of improving demand over this period.
We understand that, the overall demand scenario has remained stable over the quarter. We believe that, while the economies of USA and EU may take long to improve, the stimulus measures taken by them have eased concerns of catastrophic defaults / bankruptcies and helped them stabilise. This may prevent demand from falling in the foreseeable future. However, there is considerable unease over the proposed Immigration Bill in USA, which may weigh on the sector. We maintain our constructive view on the medium-to-long term prospects of the sector on expectations of improving demand over this period.