India’s top three IT software and services exporters — Tata Consultancy Services (TCS), Infosys Ltd and Wipro — reported strong third quarter numbers on Wednesday. While Infosys reported stellar results beating street projections for the period ending December 31, TCS and Wipro were in-line with market expectations.
Traditionally, the third quarter is seen as a weak one for Indian IT exporters due to fewer number of billable days and furloughs abroad especially around Christmas and New Year in the third quarter.
Global digitalisation helps
However, this year, driven by the ongoing digital transformation, which has been necessitated due to the Covid pandemic, businesses across the globe have sought the services of IT players to transform their industries.
Driven by this secular trend, across the board demand, and aided by their cost competitiveness, IT services companies have been seeing robust growth.
The country’s largest IT services player, TCS, said it had reached a key revenue milestone of $25-billion-plus, even as it announced an ₹18,000- crore buyback programme. Clocking $6.524 billion in the third quarter, its revenue on an annual basis grew 15.4 percent in constant currency terms. However, TCS profits were largely flat.
Rajesh Gopinathan, TCS Chief Executive Officer and Managing Director, said: “Our continued growth momentum is a validation of our collaborative, inside-out approach to our customers’ business transformation needs. Customers love our engagement model, our end-to-end capability, and our can-do approach to problem solving. While mapping out their innovation and growth journeys, we are also helping them execute new-age operating model transformations to support those journeys.”
Infosys reported $4.25 billion in revenue, a 7 per cent growth quarter-on-quarter (QoQ) and 21.5 per cent year-on-year (YoY). It also raised its FY22 revenue growth guidance to 19.5-20 per cent from 16.5-17.5 per cent it had indicated earlier.
Strategic focus
Salil Parekh, CEO and MD of Infosys, said: “Our strong performance and market share gains are a testament to the enormous confidence our clients have in us to help them in their digital transformation. This stems from four years of sustained strategic focus on areas of relevance for our clients in digital and cloud, continued re-skilling of our people, and deep relationships of trust that our clients have with us.”
Wipro, too, reported a good set of numbers. Revenue grew on a constant currency basis to $2.64 billion for the quarter ended December 2021, a 3 percent QoQ sequential growth. For the first nine months of the current fiscal, the revenues stood at $7.63 billion a growth of 28 per cent over the corresponding previous period. However, the net income in the quarter stayed almost flat at $399.1 million. Wipro was also cautious guiding for a 2-4 per cent growth for the next quarter. Wipro also declared an interim dividend of ₹ 1 per share.
However, Wipro’s CEO Thierry Delaporte, CEO and Managing Director sounded upbeat and pointed out that Wipro had delivered a fifth consecutive quarter of strong performance, both on revenues and margins.
Reporting by Venkatesha Babu. Additional inputs by BL Interns Haripriya Sureban, Isha Rautela
