DNA Money Edit: After TCS, all eyes are on Infy's quarterly earnings

Amid the chaos in the US, the biggest market for India's information technology (IT) sector, and slow-paced closures of large deals, analysts were expecting muted growth for most leading IT companies in the first quarter. Most clients in the US are holding back technology spending due to uncertainty over President Donald Trump's order for a review of H-1B visa programme for skilled workers. Rupee's appreciation of about 5% this year against the US dollar has added to their woes as it made exports costlier.

To begin with, Tata Consultancy Services (TCS) has reported 10% quarter-on-quarter (QoQ) fall in June quarter net profit to Rs 5,950 crore, making it the biggest drop in quarterly profit in two years. Margins of India's largest IT services firm were impacted by currency fluctuations. During the quarter, high currency volatility resulted in Rs 650-crore loss in reported revenues.

Now, all eyes are on Infosys which is likely to report muted numbers today (Friday). Motilal Oswal has predicted a 4.5% QoQ fall in net profit to Rs 3,438 crore, down from Rs 3,603 crore reported for the sequential quarter ended March 31. It further said the company may post 0.43% QoQ drop in revenue at Rs 17,654 crore. Kotak Institutional Equities expects Infy to post 5.4% QoQ fall in adjusted net profit, and 0.7% drop in quarterly revenues.

Everyone is looking for a report card on Infosys's progress on automation, pricing outlook and the total contract values where the company has slipped recently, apart from demand across verticals, especially in financial services. Its ongoing attrition at senior management level is indeed a sore point, though.