US slowdown hits IT cos in Q2
Early signs of softness spilling over to continental Europe (Germany, France) as well: Report
image for illustrative purpose
Muted Guidance
- Most players flagged off a soft H1
- Full year guidance cuts by Infoys/HCL
- Weak Q3 guidance by Wipro
- These factors quashed any hopes of a recovery in H2 too
New Delhi: The second quarter (Q2) proved to be another quarter of anemic top line growth for IT services companies, JM Financial Institutional Securities said in a note. Underlying trends were broadly similar to Q1. North America remains the epicenter of weakness. There are early signs of softness spilling over to continental Europe (Germany, France) as well.
BFS and telecom are most stressed, while manufacturing is holding up. Volume growth is under pressure. This is reflected in headcount decline even on a TTM basis -- a first. Deal wins -- of efficiency types -- were strong. But slower ramps and pressure on core volumes are negating impact on top line, at least in the near term, the report said.
