IT bellwether Infosys is expected to beat its March quarter guidance and deliver stronger revenue and EPS growth on the back of a broad-based technology market recovery.

Analysts see India?s second largest IT services exporter growing between 4% and 5% in dollar terms in revenues during the fourth quarter over the third quarter. This is ahead of the company?s guided range of 0.6-1.5%, or revenues in the range of $1,240 million and $1,250 million.

Brokerage house Motilal Oswal expects Infosys to post the strongest dollar revenue growth among top-tier firms at 5.2%–the growth will be driven by banking, financial services, and insurance (BFSI), as also the telecom vertical. US will continue to lead growth.

In rupee terms, however, the growth is likely to be a tad lower? between 2.4% and 3.6%?because of the rupee?s appreciation against a basket of currencies. There will be headwinds on margins. Broke- rage houses expect Ebitda margins to contract 30-75 basis points QoQ, mainly on currency volatility.

Wage inflation is a lesser issue for Infosys. Prabhudas Lilladher says Infosys, TCS and MindTree are best placed to weather attrition and wage hikes. ?We believe that Infosys and TCS would be able to sustain the margins or will have a negative impact of 50-75bps, whereas other Indian IT companies would get impacted more,? the firm said in a report.

?Infosys, TCS and MindTree have utilisation rates of 68%, 77% and 71%, respectively, the lowest among Tier-1 and Tier-2 IT services companies. Almost 58% of Infosys and TCS employees have more than three years of experience, nearing a historical high, against an average of 50%. We believe that the low-teen attrition would help them maintain the employee pyramid and rationalise cost by hiring more freshers,? the report said.

Infosys? net profits for the quarter are pegged to grow between 1.8% and 2.1% while EPS is seen around Rs 28 versus the guidance of Rs 25.6 to Rs 25.8.

Management consulting firm Zinnov says Infosys? profitability numbers could be better than its peers. ?Infosys made a lot of positive moves in the last one year. They have shown a desire to look at profitability versus volumes. There is a desire to move away from commoditised offerings to more profitable businesses,? the firm?s director of market expansion Karthik Ananth notes.

For fiscal year 2011, the firm may guide a dollar revenue growth of 12-15% and EPS between Rs110 and Rs115. Conservative with guidance, Infosys is likely to factor in protracted recovery in the macro environment, flat price realisations, as well as margin declines due to currency appreciation, analysts say.

?With client IT budgets better than expected, higher on-ground visibility, and over conservatism, which are expected to be built into the guidance, we remain confident of consistent upgrades through the year and continue to believe the company would post +20% YoY dollar revenue growth and EPS of at least Rs120 in FY11,? a report from Ambit Research states.

Analysts also expect a special dividend in April ?10 in line with Infosys? historical trend of doling it out every alternate year.