The big software companies are likely to report over 40 per cent growth in revenues and profits in the quarter ended March 31 this year, according to brokerage houses.

Infosys Technologies and Satyam Computer are expected to better their third quarter performances, but TCS and Wipro are likely to achieve lower growth rates in revenues and profits compared with their third quarter numbers, according to Merrill Lynch, JM Morgan Stanley and Motilal Oswal.

Analysts expect Infosys to post higher sales and profit in the fourth quarter than what it had forecast in its guidance. Based on an exchange rate of Rs 44.11 to a dollar, the revenue and net profit growth of Infosys are expected to be 44.4-44.7 per cent and 46.3 per cent, respectively.

If the exchange rate averages Rs 44.16, analysts expect the fourth quarter revenue growth to be around 46-49.3 per cent and profit growth of around 52-55 per cent.

In the case of Satyam Computer, revenue growth is expected to be around 32 per cent and profit growth of 24-25 per cent. Analysts expect sales and profit growth of the company to be 100-200 basis points higher than its fourth quarter guidance.

TCS and Wipro do not provide any guidance. Analysts expect TCS to post a revenue growth of 36.8-40 per cent and a net profit growth of around 41.6-52.5 per cent.

Wipro's revenues are expected to grow around 37.6-47.6 per cent, while profit growth is likely to be around 24.6-28.4 per cent.

Given the uncertainty on the US economic outlook, the rising rupee, and the lack of clarity on imposition of fringe benefit tax on stock options, analysts believe the companies may strike a note of caution on FY08 earnings.

According to Merrill Lynch, the IT industry is concerned about a possible slowdown in the US. In case of a slowdown, volume growth may be slow before picking up, as clients review spending priorities.

TCS is likely to show a margin expansion of almost 90 basis points given the beneficial impact of large deals, likely offshore shift, and SG&A (selling, general and administration) efficiencies.

Motilal Oswal research says that most of the top IT vendors concluded that there was no change in the robust business outlook with clients due to increasing offshoring demand. Currently, companies are not witnessing any slowdown in IT spending growth for calendar 2007.