Sep Q SMID Earnings Preview: Domestic IT Demand Remains Solid; Margin Expansion Continues Through Productivity Gains and SG&A Efficiency

Domestic IT demand remains robust, driven by modernization, AI, and cybersecurity. We expect revenue growth and cost efficiencies to support profit growth, although company-specific factors will create divergence. We see supportive share price levels for OBC, OBIC, and Appier, while remaining cautious on BIPROGY and Trend Micro. We expect steady IT services growth, although growth rates will vary by company. Cloud migration should drive OBC, large-scale projects should support OBIC, and e-commerce should lead Appier's growth. Modernization and IT infrastructure demand should underpin NSSOL and TISI. We expect continued margin expansion through revenue growth, productivity gains, and SG&A efficiency. Profitability should improve steadily at OBC, OBIC, RAKUS, and Appier, while the absence of one-off profit contributions at TISI, the high comparison base at BIPROGY, and rising AI-related cloud costs at Trend Micro could weigh on earnings.