Wage hikes may eat into ITcos' profits

Wage inflation and rupee appreciation will limit profit improvement. Companies could raise salaries by 10 pe rcent to 15 per cent on average this fiscal year. Some of them expect higher billing rates to offset the effect of salary increases on margins, analysts said.

For fiscal year ending March 2012, analysts on average are building in 20 per cent-25 per cent revenue growth for top three Indian software firms. Strong results and outlook from global technology major Oracle and Accenture last month have added to the upbeat tone.