Analysts, however, cautioned that the imminent salary hikes and increase in hiring could cast some pressure on the profit margins of the software companies.
“Despite lower number of working days during the quarter, we expect IT majors to post a healthy volume growth due to higher business integration and transformation work coming from mergers and acquisitions,” brokerage firm Sharekhan said.
“We expect frontline IT companies to report a 90-180 basis points sequential decline in their Operating Profit Margins in the quarter on the back of salary hike, marginal increase in selling expenses and the appreciation in the rupee and favourable cross-currency movement,” the company said.
IT major Infosys will kickstart the quarterly earnings season from January 12, followed by other IT majors — Wipro, HCL Technologies and Tata Consultancy Services.
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