By Dhanya Ann
TAKING THE PULSE: Top Indian technology companies are expected to report strong earnings growth in the seasonally weak October-December quarter, aided by a sharp fall in the Indian rupee's value, though the demand for outsourcing technology services is likely to moderate.
The rupee fell nearly 11% on average against the dollar in the October-December quarter. Most Indian software exporters get more than 80% of their revenue from the U.S. and Europe, and book benefits on currency conversion as most of their expenses are in rupees.
Brokerage UBS expects outsourcing demand to be "markedly slower" this year, weighed by the global economic uncertainties.
COMPANIES TO WATCH:
Infosys Ltd. - Reporting Jan. 12
Market Expectations: The second-largest Indian software exporter by revenue is expected to post a 29% year-on-year jump in fiscal third-quarter net profit to INR23.03 billion, according to the average of estimates in a Dow Jones Newswires poll of 24 analysts. Its revenue is forecast to rise 30% to INR92.06 billion.
These numbers are according to international accounting standards.
Key Issues: Kotak Institutional Equities expects Infosys to narrow its outlook on dollar revenue growth for the fiscal year through March to 17.0%-17.5% from 17%-19%. The house expects the company to raise its earnings outlook to INR148-INR150 a share from INR145, aided by the weak rupee.
Tata Consultancy Services Ltd. - Reporting Jan. 17
Market Expectations: The average of estimates in a poll of 24 analysts is for a 23% increase in net profit to INR28.75 billion and a 37% rise in revenue to INR132.18 billion, based on international accounting standards.
Key Issues: Citigroup expects the sector leader's earnings margin before interest, tax, depreciation and amortization to expand 261 basis points sequentially.
Wipro Ltd. - Reporting Jan. 20
Market Expectations: Wipro is likely to report a 10.3% rise in net profit to INR14.55 billion and its revenue is likely to grow 24% to INR97.20 billion, as per a poll of 24 analysts.
The numbers are based on international accounting standards.
Key Issues: CLSA Asia Pacific expects Wipro to forecast 2%-4% dollar revenue growth at its outsourcing division for the March quarter.
Emkay Global expects its earnings margin before interest and tax to expand 110 basis points on quarter.
HCL Technologies Ltd. - Reporting Jan. 17
Market Expectations: The average in a poll of 24 analysts indicates HCL would post 38% growth in net profit to INR5.52 billion and a 35% rise in revenue to INR52.39 billion, based on U.S. accounting standards.
Key Issues: Religare Capital Markets expects HCL's earnings margin before interest and tax to expand 100 basis points.
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