Motilal Oswal - MOSL: TECHNOLOGY 3QFY20 PREVIEW-Modest expectations in a seasonally soft quarter-Early budget trends for the new calendar year to be the focus

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MOSL: TECHNOLOGY 3QFY20 PREVIEW-Modest expectations in a seasonally soft quarter-Early budget trends for the new calendar year to be the focus

TECHNOLOGY 3QFY20 PREVIEW: Modest expectations in a seasonally soft quarter; Early budget trends for the new calendar year to be the focus

Growth to be tepid across Tier-I, some mid-caps to shine

In a seasonally soft quarter, (i) higher-than-usual furloughs and (ii) caution in key verticals (BFSI, Retail) will create further overhang on growth, in our view.
Major currencies like GBP/EUR/AUD appreciated (~2%-7%) sequentially, resulting in a cross-currency tailwind of 20-150bp across our coverage. Only NIIT Tech should face a cross-currency headwind of ~110bp.
We expect Tier-1 to deliver tepid organic growth of 0%-2% (CC), with Wipro/TCS leading/lagging the pack. Including inorganic contribution and cross-currency tailwind, tier-1 should report growth (USD) of 1.3%-3.5%.
Our mid-cap coverage should report growth of (6.4)%-4.3% (CC), with LTI/Cyient leading/lagging the group. Reported USD growth will likely be (5.1)%-4.5%.
Companies such as HCLT and Persistent should benefit from positive seasonality associated with their product revenue streams.

06/01/2020 14 EN

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Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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MOSL: TECHNOLOGY 3QFY20 PREVIEW-Modest expectations in a seasonally soft quarter-Early budget trends for the new calendar year to be the focus

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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