Produced by: Aakanksha Ram Chaturvedi
Designed by: Manoj Kumar
The Q2 FY24 earning season for major Indian IT players - TCS, Infosys, HCLTech, and Wipro - concluded with subdued performance. Declining revenues, growth slowdown, and hiring cutbacks were common themes. Management emphasized big deal wins and announced interim dividends and share buybacks.
TCS reported Q2 FY24 revenue at Rs 59,692 crores, up 0.5% QoQ, but in USD terms, revenue declined for the first time in over 13 quarters by 0.2%. Net profit stood at Rs 11,342 crore, up 2.42% sequentially. However, TCS' headcount saw a decrease of 6,333 employees, marking the first such drop in over two years.
TCS CEO K Krithivasan highlighted strong deal wins at $11.2 billion but expressed caution due to ongoing client optimization, project pauses, and deferrals. TCS announced a Rs 17,000 crore share buyback and a second interim dividend of Rs 9.
Infosys reported Q2 FY24 revenue at Rs 38,994 crore, with a 2.3% revenue growth in constant currency terms. Operating profit reached Rs 8,274 crore, with an EBIT margin of 21.2%. Despite a strong pipeline, Infosys lowered its guidance by 100 basis points due to slower decision-making and reduced discretionary programs.
CEO Salil Parekh explained the guidance cutback and noted a headcount dip of 7,530 employees. Infosys also announced an interim dividend of Rs 18 per share and a reduced focus on campus hiring.
HCLTech reported a Q2 FY24 revenue of Rs 26,672 crore, up 1.4%. Net profit rose by 8.6% to Rs 3,833 crore, and the EBIT margin exceeded estimates at 18.44%. HCLTech achieved an all-time high of $3.96 billion in net new bookings but adjusted its revenue growth guidance to 5-6% from 6-8%.
CEO C Vijayakumar explained the headcount decrease by not backfilling attrition. HCLTech declared an interim dividend of Rs 12 per share and a strategic approach to deployment of freshers.
Wipro reported disappointing results with Q2 FY24 revenue at $2.7 billion, down 2.3% sequentially, marking the third consecutive quarter of declining revenue. CEO Thierry Delaporte emphasized focusing on large deals and profitability, resulting in a reduced client base.
Wipro saw a headcount reduction of 5,051 for the fourth consecutive quarter. CHRO Saurabh Govil noted a halt to campus hiring drives until pending offer letters are honored.
The interim dividends and share buybacks aim to please short-term investors, while the impact of large deal wins may be felt in the next fiscal. As of now, the Indian IT sector appears to be awaiting a course correction in the global macroeconomic trends.