Coronavirus has had a great impact on the economy of the country and also several sectors’. Several IT firms suffered losses due to the impact. Now, analysts expect 4-8% decline in Q1 revenues of IT firms
These results will show the true impact of the outbreak caused to the IT firms. The heavily impacted sectors like hospitality, food, aviation will show greater losses of around 15%.
Tier 1 companies like TCS, Infosys, HCL, Tech Mahindra are expected to register 4-6% losses. Tier-2 firms might see a decline of 4.5% to 8% in revenue. All these companies will see a decrease in earnings before interest and taxes
According to the stats, 75% of the IT clients are unaffected by this impact. Sectors like BFS, utilities, healthcare, and communications are some of them. These sectors might see a 3.5-4% decrease in revenues.
The other 25% of the IT sector like retail, transport, hospitality will see a decrease of about 10-15%.
Analysts expect that midcap companies with exposure to manufacturing companies that have more on-site work are expected to see more losses compared to the rest. Also, the retailers associated with Wipro will see more losses than retailers related to HCL, and TCS, according to analysts.
The 4-8% losses will be overshadowed by the cost savings the companies achieved. This includes a reduction in travel costs, currency appreciation, and lack of salary hikes.
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