Shorter furloughs, weak Rupee may aid IT firms margins in Q3

Shorther furloughs than last year, when they were extended due to soft demand scenario, coupled with depreciating rupee, are expected to protect the margins of IT firms during the October-December period, which is otherwise seen as a weaker quarter.

“Last year furloughs were extended because on discretionary spends were weak leading to a soft demand scenario. However, IT firms are saying that this year the span is going to be normal. Further, rupee depreciation will act as a tailwinds to margins between 30-50 bps,” an analyst from a domestic broking firm said.