11-Jan-2024
2 mins read
India’s technology landscape witnessed a pivotal moment as two IT giants, Tata Consultancy Services (TCS) and Infosys, disclosed their financial results for the third quarter of fiscal year 2023-2024. These reports offer valuable insights into the performance and resilience of these tech powerhouses in an ever-evolving industry.
TCS Q3 Results
TCS, India’s largest IT services company, reported a net profit of Rs 11,058 crore for the quarter ending December 31, 2023, reflecting a 2 per cent increase compared to the same period a year ago. This modest rise in profit is noteworthy, considering the high furloughs in the BFSI and hi-tech sectors and a continued slowdown in discretionary spending.
Despite these challenges, TCS demonstrated its resilience with a consolidated revenue growth of 4% YoY, reaching Rs 60,583 crore. Moreover, the company’s operating margin expanded from 24.3 per cent in the previous quarter to a healthy 25 per cent.
In a show of confidence, TCS’s board approved a dividend of Rs 27 per share, including a special Rs 18 for the fiscal year 2023-2024. However, the reported deal’s Total Contract Value (TCV) of $8.1 billion fell short of the company’s quarterly guidance range of $9-10 billion.
Infosys Q3 Earnings
Infosys, another major player in the Indian IT sector, reported a consolidated net profit of Rs 6,106 crore for Q3FY24. This marked a decline of over 7 per cent from the same period in the previous year. The company’s consolidated revenue witnessed marginal growth, with a 1.3 per cent increase, reaching Rs 38,821 crore.
On a sequential basis, Infosys faced challenges as its profit fell by 1.7 per cent compared to the previous quarter, and revenue declined by 0.4 per cent. Revenues in constant currency (CC) terms also dipped 1% YoY and QoQ to $4,663 million. The operating margin for the quarter stood at 20.5 per cent, reflecting a decline of 70 bps QoQ and 100 bps YoY.
In response to the market dynamics, Infosys revised its FY24 revenue guidance to 1.5-2.0 per cent, down from the earlier estimate of 1-2.5 per cent, while maintaining its operating margin guidance at 20-22 per cent. Despite these challenges, Infosys secured large deals worth $3.2 billion, with a significant portion being net new contracts.
Both TCS and Infosys showcased their ability to adapt and perform amid challenges. While TCS exhibited steady growth and margin expansion, Infosys navigated a tough quarter and revised its revenue guidance. These results shed light on the resilience and strategies of these IT giants in an ever-changing industry.