IT biz expected to make strong recovery in Q3

Bengaluru: The improvement that IT companies have been seeing after the slump in the June quarter is expected to continue in the December quarter and after. Accenture, which follows a September-August financial year, recently announced the first quarter results for fiscal year 2021 that lifted its share price by 7%. The company also revised its revenue guidance for the fiscal to 4-6%, from its previously stated 2-5%, reflecting accelerated spends in digital, cloud and security.

For Indian IT, which will announce numbers in January, it is expected to be similar. ICICI Securities analysts Sudheer Guntupalli and Hardik Sangani noted that barring a few cases, they expect furloughs to be less pronounced compared to a typical December quarter as enterprises come out of lockdowns.

“Second, while the September quarter witnessed good demand recovery after revenue decline in the January-June quarter, the revenue run rate of many IT companies was still lower than the December quarter of the last fiscal. We expect the residual ‘come-back’ to help growth in the December quarter. US dollar depreciation against GBP/euro should add some cross-currency tailwinds,” they wrote.


In the last three months, TCS’s share price has risen over 20%, and Infosys’s has risen about 23%. Gartner has forecast IT spending to total $3.8 trillion in 2021, an increase of 4% from 2020. IT spending in 2020 is expected to total $3.6 trillion, down 5.4% from 2019.