With companies like Accenture, Cognizant, Infosys and Hexaware lowering FY13 guidance in December, analysts expect the third quarter to be a disappointing one for the IT sector.
As such, IT budgets continue to be flat, and deal closures slow, indicating a flat quarter.
Dollar revenue growth for Tier-1 IT companies is expected to be in the range of 1.8-3.1%, with Infy expected to cut growth to 3.6%, Kawaljeet Saluja, Rohit Chordia and Shyam M of Kotak Securities said in a note.
Operating margins for these companies are also likely to decline by 110 basis points due to the failure of strong deal wins to translate into revenue growth.
TCS and HCL are once again expected to lead IT sector growth, with overall India IT services expected to grow 8-10% going into FY14, Vimal Gohil of Asit C Mehta Investment Interrmediates said in a note.