TCS vs Infosys: Hiring, dividends, order books among 5 key things to compare in Q4FY23
- Among the positives would be large deal wins and a sharp decline in attrition rate in Q4 for both companies, however, broadly the performance elevated uncertainty ahead.
TCS vs Infosys: Two IT giants Tata Consultancy Services (TCS) and Infosys have announced their fourth quarter earnings for FY23. Both tech biggies missed Street's estimates for the quarter. But for the investors who are holding the two stocks are in for a treat as both TCS and Infosys have announced a final dividend for FY23. Among the positives would be large deal wins and a sharp decline in attrition rate in Q4 for both companies, however, broadly the performance elevated uncertainty ahead. Across the verticals, the companies majorly witnessed negative to single-digit growth, while the US market becomes a key concern area forward.
On Wednesday, Infosys' share price closed at ₹1,388.60 apiece down by 2.79% on BSE. TCS tumbled by 1.61% to end at ₹3189.85 apiece.
TCS is the largest IT firm, while Infosys holds the second spot in terms of market share.
By end of April 13th, TCS m-cap is over ₹11.67 lakh crore and Infosys held an m-cap of more than ₹5.76 lakh crore.
Let's compare 5 key major highlights between TCS and Infosys during Q4FY23 and FY23.
1. Profitability and margins:
Infosys is the latest to announce Q4 results. In the quarter, the company posted a sequential drop of 16% to ₹6,128 crore. However, PAT improved with a growth of 7.8% from ₹5,686 crore in Q4 of FY23.
Overall, in FY23, Infosys’ annual consolidated net profit rose by 9% to ₹24,095 crore from 22,110 crore in FY22. The operating margin of the company stood at 21% for both the fourth quarter and overall FY23.
In the case of TCS, the Tata Group-backed company garnered a net profit of ₹11,436 crore in Q4FY23, up by 14.8% YoY and 5.03% QoQ. Further, the net margins stood at 19.3%, while operating margins came in flat at 24.5%.
Unlike Infosys, TCS sequentially posted a single-digit growth in Q4.
For the full year, FY23, TCS' profit rose 10% to ₹42,303 crore from ₹38,449 in FY 22.
2. Top-line front:
In regards to revenue, TCS saw a meager 1.6% to ₹59,162 crore from ₹58,229 crore in the third quarter of FY23. On the other hand, Infosys registered a fall of 2.2% in its revenue to ₹37,441 crore in Q4FY23 from ₹38,318 crore in the previous quarter. Year-on-year, TCS, and Infosys recorded a growth of 16.94% and 16% respectively.
In constant currency, Infosys' revenue growth dipped by 3.2% QoQ but was up by 8.8% YoY. TCS revenue growth stood at 10.7% YoY.
For the full year, TCS clocked in a revenue of ₹2.25 lakh crore, which increased by 17.58% from ₹1.92 lakh crore in FY22. Revenue operations of Infosys jumped by 20.7% to 1.46 lakh crore in FY23 from 1.21 lakh crore in FY22.
3. Order book:
In terms of the order book, TCS recorded an all-time high number of large deals in Q4FY23. The company's pipeline comes at $10 billion in the fourth quarter. For the full year FY23, the company's order book comes at $34.1 billion.
On the other hand, Infosys received orders worth $2.1 billion in Q4 FY23. For the full year, the order book stood at $9.8 billion.
4. Hiring and attrition rate:
Although, both Infosys and TCS saw a steep decline in IT Services LTM attrition rate, however, both companies were in opposite directions when it came to employees count in Q4FY23. It needs to be noted that Infosys saw a much sharper reduction in attrition rate than TCS. Meanwhile, where TCS made a slight net addition in its headcount, Infosys let go of a massive number of employees during the quarter.
Infosys attrition rate dipped to 20.9% in Q4FY23 compared to 24.3% in December 2022 quarter. While the TCS attrition rate slipped to 20.1% compared to 21.3% in Q3FY23.
Coming to employees count, TCS made a net addition of 821 in Q4 -- taking the total to 614,795 employees by end of the fiscal. On the contrary, Infosys reduced its workforce by 3,611 employees -- taking the total headcount to 3,43,234 employees in Q4FY23. TCS also said the company honoured all job offers in FY23, and also onboard over 44k freshers.
In the December 2022 quarter, TCS' headcount stood at 613,974 employees, while Infosys had 3,46,845 employees.
5. Dividend benefits:
Both IT giants have announced the final dividend for FY23.
TCS declared a dividend of ₹24 per equity share. The company will announce the record date for the final dividend in due course. Prior to the final dividend, TCS has already paid a total of three interim dividends to the tune of 9100% aggregating to ₹91 per equity share to shareholders for FY23.
Whereas Infosys declared a dividend of ₹17.50 per share. The company had earlier paid a dividend of ₹16.50 per equity share. Together, Infosys paid a total of ₹34 per equity share in FY23 -- rising by 9.7% from the previous fiscal FY22. The company has fixed June 2nd as the record date to determine eligible shareholders.
Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Business NewsCompaniesNewsTCS vs Infosys: Hiring, dividends, order books among 5 key things to compare in Q4FY23
First Published:13 Apr 2023, 08:37 PM IST
- Top Gainers
- Top Losers
- 52 Week High