IT Q3 results: TCS and Infosys beat Street estimates, Wipro misses
– World Affairs SRS
Even though TCS managed to post strong revenue growth, it missed Bloomberg’s estimates on operating profit. TCS margin came in at 25 per cent. The company also announced on Wednesday that its board has approved a buyback plan of up to Rs 18,000 crore at Rs 4,500 per share. This is the company’s fourth buyback in five years. The total cash returned to shareholders in the first three buybacks added up to Rs 48,000 crore.
“Infosys reported another quarter of excellent all-round growth in financial parameters. Ashish Das, Research Analyst, Sharekhan, BNP Paribas, said, “We believe the company is expected to report industry-leading organic revenue growth among larger peers, given strong demand, good deal wins, strong deal pipeline and market share gains. is in good condition.
But the clear message from the performances of the top three IT services players was that the growth momentum in a traditionally soft quarter is strong. Mostly, growth is being driven by digital transformation and cloud adoption.
In Infosys’ case, the company not only beat its constant currency revenue growth by 7 per cent on a sequential basis, it also raised its FY22 revenue guidance from 19.5 per cent to 20 per cent from 16.5 per cent to 17.5 per cent. Percentage growth target What stood out for Infosys was its margin performance despite rising job losses, and higher salary costs. Margins for the quarter came in at 23.5 per cent.
After crossing the $25 billion mark in revenue for CY21, TCS’ constant currency revenue grew 4 percent sequentially and 15.4 percent year-on-year. The company said that from the perspective of the third quarter, this is one of the highest growth in the last five years.
Though Wipro was supported by growth in most key segments, consolidated revenue grew 29.6 per cent year-on-year and 3.3 per cent quarter-on-quarter to Rs 20,314 crore. For the IT segment, while the reported sequential growth was 2.3 per cent, on a constant currency basis, the company posted a growth of 3 per cent. This was lower than consensus estimates that projected growth of 4 percent and was within the mid-range of the company’s directed 2-4 percent growth.
In terms of deal pipelines also, all three companies reported healthy growth, indicating that the fiscal would end the year with double-digit growth. TCS reported a total contract value (TCV) of $7.6 billion, while Infosys’ major deals were valued at $2.53 billion. In Wipro’s case it was $2.85 billion.
Growth for the top two players was broad across regions and regions. “The $7.6 billion TCV is broad-based and not tied to any particular deal or sector. We have seen demand across all sectors and sectors,” said Rajesh Gopinthan, CEO and MD, TCS. Gopinathan said the company’s annual TCV is $23.3 billion.
But the biggest concern that all three displayed in the quarter was rising attrition. But the companies said they had seen a reduction in layoffs on a quarterly basis.
Today’s quarterly results show strong fiscal growth. “Attrition has a challenge that they need to address urgently,” said DD Mishra, senior director analyst at Gartner. He pointed out that the 20-30 per cent job loss rate is not sustainable, and people in this category may need to re-evaluate the situation. According to Mishra, this could affect the financial performance of IT service providers in the coming times.
The results of all the three companies were declared after the close of the market on Wednesday. Before the results on the NSE, shares of Infosys closed with a fall of 1.5 per cent, Wipro 0.45 per cent and TCS by 1.5 per cent. However, on the NYSE, Wipro’s ADR (American Depository Receipt) was down 8 per cent (10 pm IST) in early trade, while Infosys’ ADR was up 2.4 per cent.
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