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Even as IT majors TCS, Infosys and Wipro have declared their Q4 results, Tata Consultancy Services (TCS) has displayed the most resilient performance amid a challenging business environment. The Tata group company was able to outperformance Infosys and Wipro on the back of a multi-year-high new deal pipeline and high growth in regional markets, according to analysts.
Financials for Infosys and Wipro were weak as the companies were not able to ensure timely ramp-up of deals and fell prey to indecisive and subdued discretionary spending, said Dhruv Mudaraddi, research analyst at Stoxbox.
He pointed out that the attrition rate was the highest for Wipro, followed by Infosys and then TCS. “Year-end headcounts reflect a significant reduction for all three companies for the first time over a decade.”
“Amid a challenging business environment, between TCS, Infosys, and Wipro, TCS’ result displayed the most resilient performance across all fronts,” Mudaraddi said.
TCS was able to continue banking on its megadeals for healthy billing and was also able to ensure that their new deal pipeline continued to grow to multi-year highs underscoring their efficiency and proactive innovation in terms of services they provide to clients, he added.
What Do Q4 Financial Results Reveal About Overall IT Sector in General?
Mudaraddi said the decline in headcount in the IT sector reflects a cooling down of the job market after the pandemic-induced digital boom led to aggressive hiring by companies and startups. This comes at a time when IT companies are looking to improve the utilisation rate of existing employees amidst lowering attrition, to grow margins.
“After looking at the results of the three biggest IT services firms, one can notice a clear focus on efficiency and increasing utilisation to subsequently realise higher margins in a challenging demand environment where discretionary spending has been on a decline. This environment has a few green shoots, for example in the manufacturing and healthcare sectors. However, the largest sectors of BFSI, retail and energy still remain weak and recovery can only be expected from Q2FY25 onwards as finalised client budgets will come into execution,” he said.
On headcount, the total number of employees of TCS fell by 13,249 to 6,01,546 during the financial year 2023-24. As on March 31, 2024, Infosys’ total headcount stood at 3,17,240, which is a 7.5 per cent decline as compared with the total number of employees a year ago.
Wipro’s headcount has also fallen 9.5 per cent to 2,34,054 employees in the financial year 2023-24, compared with 2,58,570 a year ago.
TCS Q4 Financial Performance
Tata Consultancy Services reported a 9.1 per cent growth in its March quarter net profit at Rs 12,434 crore. In the fiscal year 2023-24, the company’s net profit grew 9 per cent to Rs 45,908 crore. The Tata Group company’s post-tax profit during the January-March period last year stood at Rs 11,392 crore.
In the March quarter, its revenue grew 3.5 per cent to Rs 61,237 crore year on year.
Infosys Q4 Financial Performance
IT major Infosys on Thursday posted a 30 per cent year-on-year jump in its net profit to Rs 7,969 crore for the fourth quarter ended March 2024 quarter. However, its revenues during January-March 2024 rose just 1.3 per cent YoY to Rs 37,923 crore, compared with Rs 37,441 crore a year ago.
Infosys’ net profit had stood at Rs 6,128 crore in the corresponding quarter last year.
On a year-on-year basis, Infosys’ revenue declined 2.3 per cent during the March 2024 quarter to Rs 37,923 crore, against Rs 38,821 crore in the previous December 2023 quarter. Its net profit jumped 30.5 per cent sequentially.
Wipro Q4 Financial Performance
IT major Wipro on April 19 reported an 8 per cent year-on-year (YoY) decline in its net profit to Rs 2,835 crore for the March 2024 quarter (Q4 FY24). Its revenue during January-March 2024 declined to Rs 22,208.3 crore, compared with Rs 23,190.3 crore in the year-ago period.
Wipro’s net profit had stood at Rs 3,074 crore in the corresponding period last year.
In dollar terms, Wipro’s IT services revenue during Q4 FY24 stood at $2,657.4 million, an increase of 0.1 per cent QoQ and a decrease of 6.4 per cent YoY, according to a regulatory filing.
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