Results preview: Q3 may drive caution for IT sector, better margins likely

Almost all the tierI companies in the Q2 of FY23 had signalled then that though the current macro has not impacted budget in general, there are specific pockets where delay in deal closure was evident

Traditionally, the second half of a financial year is weak for the information technology (IT) services industry owing to furloughs. But the third quarter of FY23 may be further muted with a deteriorating macro scenario because of which companies are showing concerns on deal closure.

The cautionary note was brought in by HCLTech. The company’s management — during its investor day in the first week of December — indicated that FY23 revenue could be at the lower end of the guidance. The reason for this was higher furloughs in sectors like banking, financial services and insurance (BFSI) and hi-tech.

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