TCS achieved revenue of $25 billion; Infosys extended guidance

The quarter ended December 31 is considered weak for IT firms as they have fewer working days in key markets- the US and Europe.

Infosys outperformed its rivals, raising its full-year revenue growth forecast to 19.5-20% at constant currency from 16.5-17.5%, citing strong demand.

“We are in a position where all the choices we have made over the years in the digital, cloud and new areas are in line with our customers… Our performance has been good, and that is what really gives us confidence that our Enhanced guidance,” said Salil Parekh, CEO and Managing Director, Infosys.

Wipro, which forecasts for the quarter ahead, expects March quarter revenue to grow in the range of 2-4% in constant currency for the past three months, a full-year growth of 27-28%. TCS does not provide revenue growth forecast, but it has indicated an upbeat outlook.

TCS net profit up 12.3 per cent in December quarter over a year ago 9,769 crore on strong revenue growth of 16.3% 48,885 crores. Consensus Bloomberg forecasts TCS profit 9,980 crore and on revenue 48,533 crores. The Mumbai-based company’s dollar revenue rose 15.4% in constant currency to $6.52 billion. TCS said that strong growth over the past four quarters helped it generate revenue of $25 billion on a calendar-year basis. TCS CEO and Managing Director Rajesh Gopinathan said, “Our continued growth momentum is a validation of our collaborative, insider approach to the business transformation needs of our customers.”

TCS board also approved 18,000 crore share buyback 4,500 each, up about 16.6% from Wednesday’s closing price 3,857.25 on BSE

Bengaluru-based Infosys profits up 11.8% 5,809 crore on the back of strong revenue growth of almost 30% 31,867 crore, Bloomberg’s profit estimates above consensus 5,745 crore and revenue 30,868 crores.

Wipro’s net profit was slightly changed on a yearly basis 2,969 crore revenue also increased by 27.5% 20,313 crore on broad-based development. According to a Bloomberg survey, analysts had forecast Wipro’s profits 3,002 crore and revenue 20,270 crores.

Driven by growth across sectors, Infosys posted revenue growth of 7% sequentially to $4.25 billion in constant currency, while Wipro’s dollar revenue grew 3% sequentially to $2.64 billion in constant currency.

“Wipro has delivered strong performance for the fifth consecutive quarter on both revenue and margins. Order bookings have also been strong, and we’ve added seven new customers to the league in excess of $100 million in revenue over the past 12 months. “Our strategy and superior execution have served us well, and we are confident of building on this momentum,” said Thierry Delaporte, Wipro CEO and Managing Director.

Customers are focusing on technology modernization and investing in areas such as cloud computing and digitization, increasing demand for IT companies.

However, the high job dropout rate is a challenge that is being faced by all the three IT companies.

Based on the previous 12 months, TCS’ job loss rate in the December quarter was the lowest among its peers at 15.3%, but was faster than the 11.9% in the previous three months. Infosys’ job loss rate increased from 20.1% in Q2 to 25.5%, while that of Wipro increased to 22.7% from 20.5% in Q2.

Management of all three companies indicated that supply-side pressure is a trend across the industry and is likely to ease in the fourth quarter.

“Redesigning their organizational strategies to suit the current needs of customers and employees has worked in favor of IT services organizations in the country. As seen in the results, TCS, Wipro and Infosys continued to grow in the last quarter,” said analyst DD Mishra, senior director at Gartner.

The companies announced their earnings after the close of the market on Wednesday. TCS shares closed down 1.5% 3,857.25 while Infosys closed up 1.16% 1,877.60 and Wipro down 0.4%. closed on 691.35 on BSE.