The October-December quarter broadly marked a turning point for domestic IT firms, with signs of revival in discretionary spending and a healthy order book. This was met with some optimism by analysts as the quarter is seasonally a weak one due to furloughs.
While Infosys and Wipro exceeded Street expectations, TCS and HCLTech were not able to meet analysts’ forecasts. Despite robust deal wins, challenges in total contract value (TCV) conversion and sustained growth in emerging markets remain concerns for the industry.
Also ReadRIL’s O2C segment to pick up in FY26, say brokerages
Infosys and Wipro outperformed, buoyed by strong demand in financial services and growth in the Americas. TCS and HCLTech, however, faced seasonal weaknesses that tempered their performance. Infosys posted sequential revenue and profit growth, driven by improved demand in financial services across the US and Europe. MD & CEO Salil Parekh noted, “In the last quarter, we saw discretionary spending recover in US financial services. This quarter, we are witnessing similar trends in Europe, along with improving demand in US retail and consumer products.”
Also Read Infosys Q3 earnings on January 16: Here are 4 key things the street is watching out for QSRs stare at another weak quarter in Q3 RIL Q3FY25 results: Brokerage expect flattish growth Modest Q3 on the cards for India Inc
Wipro reported a minor revenue uptick, surpassing expectations due to strong demand in the Americas and the BFSI sector. CEO Srini Pallia said: “Clients are cautiously optimistic, and we’re seeing a gradual return of discretionary spending.”
Conversely, TCS missed estimates on both revenue and profit, citing seasonal Q3 weaknesses. HCLTech reported sequential growth in revenue and operating margins, but fell short of analysts’ expectations.
Despite mixed earnings, all four companies reported robust deal wins. Infosys’ large deal TCV rose marginally to $2.5 billion from $2.4 billion in Q2. Parekh highlighted increased deal activity across financial services and retail sectors. TCS reported an impressive TCV of $10.2 billion, up from $8.6 billion in Q2. CEO K Krithivasan said: “This well-rounded performance spans industries, geographies, and service lines”.
HCLTech’s total deal value decreased slightly to $2.1 billion from $2.2 billion in Q2, reflecting shorter deal tenures. CEO C Vijayakumar said: “The shift toward shorter-tenure deals is moderating TCV,
» Read More
