It’s been clear in the past two years that there’s been an increasing polarization in the performance of India’s top IT companies; and this trend was starkly visible in the June quarter as well. Infosys Ltd and Wipro Ltd reported a 1-1.5% drop in revenues in dollar terms, while Tata Consultancy Services Ltd and HCL Technologies Ltd reported a 3% sequential increase in dollar revenues. HCL reported a surprisingly high jump in margins as well, which has helped it to be the only large IT stock to have gained since the beginning of the results season. Its shares are up around 5% since July 12, when Infosys kicked off the results season. The drop in Infosys and Wipro’s revenues and the weak outlook these companies provided for the future have resulted in an 11-12% drop in their shares.
With the exception of HCL, each of these companies witnessed pressure on pricing and on margins, which is a worrying sign. Some analysts are of the opinion that the muted growth for the industry this year could lead to increased price competition and hence lower margins. Unless Cognizant Technology Solutions Corp.’s results announcement in early August points to a different trend, Indian IT stocks are likely to remain weak in the near term.
For a more detailed analysis of each of these companies’ results, click the following links:
Mark to Market | Cognizant results encouraging for Indian IT sector investors
By Mobis Philipose
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to read full analysis
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Cognizant overtakes Infosys on quarterly revenue
By Anupama Chandrasekaran
India’s third largest information technology (IT) company continued its streak of industry-leading revenue growth partly due to a revival in technology spending in the financial sector—the industry bringing in the largest chunk of revenue.
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to read full story
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Francisco D’Souza | We aim to once again reinvent ourselves
By Anupama Chandrasekaran
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to read edited excerpts from an interview
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Mark to Market | Infy debacle makes TCS’s muted growth look impressive
By Mobis Philipose
This time around, it reported a 3% sequential growth in revenue to $2.73 billion (around Rs. 15,206 on 13 July).
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to read full analysis
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Mark to Market | Infy goes from bad to worse
By Mobis Philipose
While most analysts had expected the company to cut its annual dollar revenue growth target to between 6% and 8%, Infosys said that it now expects to grow by at least 5% to $7.34 billion (around Rs. 40,884 crore on 13 July).
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to read full analysis
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Mark to Market | Wipro: wrong turn on a turnaround?
By Mobis Philipose
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to read full analysis
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Mark to Market | HCL Tech lifts investor mood with positive earnings surprise
By Mobis Philipose
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to read full analysis
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Infosys cuts guidance; TCS beats expectations
By Leslie D’Monte & Sridhar K. Chari
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to read full story
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Watch Video
N. Chandrasekaran talks about TCS’ first quarter earnings and how its maintaining its pricing power
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You cannot drop price and create volume
By Sridhar K. Chari
For Infosys chief executive and managing director S.D. Shibulal, all the “early indicators” are there that the new strategic direction Infosys has embarked on is bearing fruit. Organizational execution will soon catch up, he believes, and the company is still chasing “high-quality growth” with industry leading margins as a key characteristic.
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to read edited excerpts from an interview
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Wipro’s IT biz revenue falls; margins, forecast muted
By Sridhar K. Chari
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to read full story
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The secular bull run is over
By Sridhar K. Chari
Wipro Ltd’s information technology (IT) business chief executive officer (CEO) T.K. Kurien believes the company has got its strategy and execution right, and it is only a matter of time before the effort and investment start showing in its financial results.
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to read edited excerpts from an interview after the first-quarter results announcements
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HCL beats gloomy trend as profit jumps
By Surabhi Agarwal
New Delhi: HCL Technologies Ltd, India’s fourth-largest computer services firm, reported a net profit increase of 67.3% for the three months ended 30 June from a year earlier, turning out a performance that bettered that of larger peers Infosys Ltd and Wipro Ltd in terms of dollar revenue growth.
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to read full story
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Macroeconomic issues will remain challenging
By Surabhi Agarwal
Chief executive and vice chairman Vineet Nayar says there aren’t many choices available for businesses apart from innovation
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to read edited excerpts from an interview
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Views | India’s IT majors will have to live with pricing pressures
By Sundeep Khanna
Over the last couple of weeks, the holy trinity of India’s IT services business – TCS, Infosys and Wipro – put out their quarterly numbers and till HCL came along to buck the trend, the results have been uniformly disappointing. While growth has clearly slowed down for the three majors what’s most worrying for sector watchers is that price realizations in the off-shoring business continue to fall.
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to read full analysis
