The January-March quarter results for FY2009 reflect the muted growth of Indian IT companies. A look at what lies in the future for the companies in this sector.
Though on a downward curve, economists warn of inflationary pressures still existing in the system which might prevent the Reserve Bank from going in for rate cuts over the next three months. "The RBI is targeting an inflation level of 5-5.5 per cent. If, however, it continues to remain in double digits till January, then the tight monetary policy would continue," Crisil Director and Principal Economist D K Joshi said.
The Indian equity market is likely to see one of its worst phases, with most sectors expected to report a decline in earnings or single-digit earnings growth in Q4 FY'09, a leading broking firm said in its report.
A substantial expected increase in the Treasury Bill floatation could also contribute to a tightening liquidity situation, the report said. These included a 0.50 per cent cut in cash reserve ratio with effect from January 17, a 1 per cent reduction in the reverse repo rate with immediate effect and a slashing of the repo rate by 1 per cent from 6.5 per cent to 5.5 per cent.
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