India's IT Services Firms Record 14 - 20 Percent Y-o-Y Growth in December
India's IT service firms recorded 14-20 percent year-on-year topline growth in the December quarter, as they increased their guard against global uncertainties and turbulent markets, but remained optimistic that cost and business factors will drive tech demand.
Large IT firms such as Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies kicked off the tech earnings season this week, amid analysts' pessimistic forecasts of a slowdown in advanced economies and geopolitical tensions.
The industry leaders stated that they are closely monitoring the global economy and trends.
Meanwhile, the top IT deck's December-quarter net profit increased year on year by three percent (Wipro) to 19 percent (HCL Tech), and sequentially by four percent (TCS) to 17 percent (HCL Tech).
TCS' overall revenue increased 19.1 percent in the reporting period to Rs 58,229 crore. Rajesh Gopinathan, chief executive and managing director of India's largest IT services company, said the company is more confident about its North American and British operations, which account for two-thirds of its revenues, but there are short-term uncertainties, and Europe requires closer monitoring as geopolitical tensions prevent clients from spending on IT.
Last week, Wipro Ltd reported a better-than-expected 2.8 percent increase in consolidated net profit for the December 2022 quarter to Rs 3,053 crore, and expressed optimism about high fourth-quarter bookings amid global challenges
Infosys increased consolidated revenue by 20.2 percent year on year in the December quarter to Rs 38,318 crore, surprising many by raising full-year sales outlook to 16-16.5 percent.
Infosys' consolidated net profit increased 13.4 percent year on year to Rs 6,586 crore for October-December 2022, from Rs 5,809 crore. Net profit was 9.4 percent higher than in the previous quarter.
The company upped its annual sales projection due to a robust deal pipeline, but warned of constraints in key verticals due to the deteriorating global economy.
Infosys singled out mortgage, investment banking, telecommunications, and high-tech as being "particularly impacted, resulting in delays in decision making and uncertainties in spending."
However, the corporation was keen to point out that sectors such as energy, utilities, and manufacturing are still gaining traction.
Last week, Wipro Ltd reported a better-than-expected 2.8 percent increase in consolidated net profit for the December 2022 quarter to Rs 3,053 crore, and expressed optimism about high fourth-quarter bookings amid global challenges.