Indian IT firms are set to report dismal fourth quarter results on account of rupee appreciation and upcoming elections.
The results, which would start trickling in from April 15, are expected to softer than usual, analysts said.
While the January-March is seasonally muted, this time upcoming polls has slowed down India business as government contracts are being delayed, they said.
The rupee which has come down below $60 to a dollar is also impacting revenues as IT firms which earn mostly in dollars realise less in rupees.
Already, Tata Consultancy Services, India's top IT firm, and Infosys have guided dismal fourth quarter.
Ankita Somani, IT analyst with Angel Broking, said, "We expect Q4 results to be slower than Q3 on account of rising rupee and elections impacting India's business of all the IT players, apart from seasonality."
The volume growth for top-tier IT firms is expected to be 0-3%, with TCS leading the pack, followed by HCL Technologies, Wipro and Infosys, she said.
"We expect TCS to report dollar revenue growth of 2.5-3%, while it is expected to be 2.3-2.8% for HCLT, 1-2% for Wipro and 0-1% for Infosys. Rupee appreciation is expected to have a 20-30 basis points impact on an average for Tier-I IT firms."
Ashwin Mehta and Pinku Pappan of Nomura Securities expect HCL Tech, Tech Mahindra and Wipro to report a 3% quarter-on-quarter dollar revenue growth in fourth quarter, ahead of Infosys and TCS.
Last week, global consulting major Accenture reported second-quarter results that were largely in line with estimates, with good growth in both consulting and outsourcing revenues.
This has led analysts to be optimistic about growth for Indian software firms in the next fiscal.
Bhuvnesh Singh and Hitesh Das of Barclays in a report said that Accenture's management increased its revenue guidance for this fiscal to 3-6% on year (from 2-6% on year in local currency) and raised expectations for new bookings in this fiscal to $33-36 billion (from $32-35 billion earlier).
"This should bode well for Indian IT companies given that approximately 60% of revenues for the four top companies originate from the US."
TCS, too, expects fiscal 2015 to be better year than the current one and Infosys sees its new strategy for sales effectiveness leading to improvement in growth rates from mid-next calender year.
While the March 2014 quarter expectations for Infosys and TCS remain muted due to vertical and geography-specific issues, the Barclays analysts said this would be a short-term phenomenon.
Rumit Dugar and Pranav Kshatriya of Religare Securities said, "Overall, the read-through from Accenture is positive for Indian IT, given the strength in new bookings and tightening of the full-year guidance band.
We remain positive on the demand trend and continue to prefer large-caps in the Indian IT space."