Fiscal 2011-12 has been a roller coaster ride for the Indian IT sector, and brokerage firms are expecting earnings for the January-March period to reflect the testing times it has gone through in the past few quarters. Revenue growth, say analysts, will be low to moderate, while margins are likely to be lowered, thanks to a stronger rupee compared to the previous quarter.

Average quarter-on-quarter revenue growth for top-tier firms is being pegged in the region of 1.7- 2% against 2.6% in the previous quarter. Volume growth is expected to range between 0.4% and 3.5% sequentially, with TCS and Wipro leading the pack, and Infosys bringing up the rear.

Infosys’ results will kick off results season on April 13, with its guidance setting the tone for sector performance.

?We expect the company to guide for FY13 revenue growth in the broad 10-15% range to incorporate macro uncertainty and the shortened tenors of the projects,? a note from Barclays Research said.

?The March quarter saw the impact of a delay in decision making on discretionary spends that led to lower volumes. Therefore, we expect the top four IT firms to report another weak performance in terms of revenues for the quarter ended March,? said Sanjeev Hota, assistant vice-president, IT research, Sharekhan Financial Services.

Revenue growth over the previous quarter for TCS, Infosys, Wipro and HCL have been estimated at 1.3%, 0.9%, 2% and 3.8% respectively. In terms of net profits, TCS and Infosys may report a fall. HCL is likely to remain flat, and Wipro will grow on account of increased other income, Sharekhan analysts said. Angel Broking estimates Infosys profitability to decline by 2.6%, and TCS, Wipro and HCL are expected to report growth of 2.3%, 4.5% and 7.6%.

A major sore point for firms this year will be the unfavorable rupee movement. Its appreciation through the period under review could result in firms shedding anywhere between 60 bps and 200 bps in operating margins.

?During Q3 of the fiscal, the rupee had depreciated by 12% sequentially, which resulted in higher rupee revenue growth, and boosted the operating margins of IT players by 100-350 basis points q-o-q. But in the fourth quarter, rupee gained 1.1% q-o-q against dollar, which will negatively impact rupee revenue growth and operating margins,? said Ankita Somani, an IT analyst with Angel.

TCS and Infosys are likely to be hurt the most, whereas, shrinkage for Wipro and HCL are likely to be in the lower end of the range. Angel has projected Ebitda margin of Infosys and TCS to slip by 59 basis point and 19 basis point q-o-q, respectively; flat growth for Wipro IT Services, and a 30 basis point gain for HCL.