homeearnings NewsTCS vs Infosys vs Wipro vs HCLTech Q3 Results: Who scored better on all parameters?
TCS vs Infosys vs Wipro vs HCLTech Q3 Results: Who scored better on all parameters?
The December quarter is typically a seasonally weak period for this sector but the large-cap IT companies have beaten expectations — that were running low due to seasonality, weak macros and the cut in discretionary spending, but the companies did fairly well despite it being a difficult quarter.
The third quarter earnings season for the information technology (IT) sector kickstarted with industry leaders Infosys and Tata Consultancy Services (TCS) on Thursday (January 11) followed by Wipro and HCL Technologies on Friday.
The December quarter is typically a seasonally weak period for this sector but the large-cap IT companies have beaten the low forecasts. Expectations were running low due to seasonality, weak macros and the cut in discretionary spending, but the companies did fairly well despite it being a difficult quarter.
All four IT companies topped what the Street was anticipating. HCLTech led the pack with a 6% topline growth aided by large deal ramp-up and an acquisition. TCS reported a 1% revenue growth against estimates of low growth. Infosys and Wipro saw a revenue contraction, but not as much as what the Street feared, in the third quarter.
The margin performance has also been strong — three out of the four companies have reported a margin beat, including TCS, Wipro and HCLTech. For TCS, margins have expanded for the second consecutive quarter, improving by nearly 70 basis points (bps) on a quarter-on-quarter (QoQ) basis.
Wipro has managed to hold margins at 16% band despite a wage hike impact. HCLTech has clocked in a solid margin expansion of 130 bps at 19.70%.
FY24 guidance
Both HCLTech and Infosys have narrowed their full-year growth forecast. Infosys is now likely to end the year with a 1.5-2% revenue growth for the full-year, while for HCLTech the upper end of the guidance band from 6% was brought down by 50 bps and the company is going to see 5-5.5% revenue growth.
Other noteworthy highlights include:
The large-cap IT companies seem to have done their bit in terms of helping with the Q3 earnings season.
(Edited by : Shoma Bhattacharjee)
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