TCS, Infosys, HCL Tech and Wipro showcase robust performance in challenging third quarter

The major Indian Information Technology (IT) firms have surpassed earnings expectations, despite facing challenges in the October to November quarter (Q3) such as seasonal difficulties, increased furloughs, and weakened discretionary demand.

TCS achieved a 1% revenue growth, exceeding street expectations, while HCL Tech outperformed with a 6% topline revenue growth against an anticipated 4%.

Additionally, the companies exhibited robust margin performance. TCS expanded margins for the second consecutive quarter, Wipro maintained margins at 16%, and HCL Tech exceeded margin expectations by 110 basis points, reaching 19.8%. Infosys reported a solid margin of 20.5% and maintained its full-year margin forecast.

For full-year FY24 growth, Infosys and HCL Tech narrowed their guidance. Infosys projected a 1.5-2% growth, while HCL Tech anticipated a 5-5.5% growth.

All four companies experienced steady deal wins, notable decreases in attrition rates, and continued pressure on financials, communications, and hi-tech segments. However, the manufacturing segment exhibited substantial growth.

Furthermore, the management commentary conveyed a more optimistic outlook. TCS expressed expectations for FY25 to surpass FY24, and Wipro indicated the observation of green shoots in discretionary spending.