New Delhi: Major IT firms are expected to post a decline in revenue growth in the fourth quarter of 2008-09, primarily on account of project cancellations, say analysts.
“Indian vendors have witnessed several project cancellations during the third and fourth quarter of FY’09. The magnitude of project cancellations is different for different vendors,” domestic brokerage firm Motilal Oswal said in its India strategy report.
Along with project cancellations, delays in client decision making will cast a toll on 4QFY’09 volumes, it said.
“We expect IT companies to report QoQ USD revenues declines owing to stressed volumes and declining realisations. This is the second consecutive quarter where the sector will see USD revenue degrowth,” it said.
The rupee has depreciated 4.69% against the US dollar during the March quarter, while on an year-on-year basis it has depreciated over 27%.
“Hence, the top-line growth even in rupee terms is expected to remain flat to marginally negative on an organic basis during the quarter,” brokerage firm Sharekhan said in its IT earnings preview.
Meanwhile, the appreciation of the dollar against other international currencies (euro and pound sterling) would impact the dollar term revenues of the front-line IT firms.