Infosys reported a decline of 0.8% in revenue growth sequentially while Wipro saw a steeper fall of 10.2% as compared to the preceding quarter.
TCS also has over three lakh employees now, which is almost equal to the number of employees Infosys and Wipro together have on their rolls. Though TCS always enjoyed a higher revenue base but it was Infosys which reported superior operating profit margins (OPM) setting a benchmark for the Indian IT industry. Even this index has undergone a change from the second quarter of FY13 as TCS started to report higher margins. During the quarter, TCS reported an OPM of 26.3% while it was 25.1% for Infosys. Wipro saw a drop in operating margins to 22.8% for the quarter against 24.5% in the previous quarter.
TCS has already stated that it would beat the industry growth guidance of 13-15% in US dollar for the fiscal as projected by Nasscom, while Infosys has retained its revenue guidance at 7-9%. TCS has started FY15 also on a very strong note by recording a 5.5% sequential revenue growth in US dollar terms for the first quarter with volumes growing at 5.7%. Infosys on the other hand grew its revenues only by 2% in the first quarter, with volumes growing by 2.9%. Wipros IT services revenue grew by 1.2% and the company does not give full year guidance.
TCS, Infosys, Wipro and HCL Technologies together account for close to 40% of Indias IT services revenues, but the degree of separation between the four have started to tell a story of its own. TCS ended FY14 with a revenue growth of 16.2% in US dollar terms while it was 11.5% for Infosys and 6.4% for Wipro.
TCS: Q1 NET PROFIT
TCS beat Street estimates reporting a profit of R5,058 crore in the first quarter of the current fiscal, a sequential decline of 4.5%. The companys revenue stood at Rs 22,111 crore, a 2.6% sequential rise while operating income increased 7.4% to Rs 5,815 crore. Despite taking a one-time charge for depreciation, giving employees a wage hike and the appreciation in the currency, the company reported operating margins of 26.3%.
CEO and managing director N Chandrasekaran was confident the current year would be better than FY14, pointing out that the company had reported the second-highest incremental dollar revenues ever in Q1, FY15. We have seen good growth across geographies and all verticals except BFSI (banking, financial services and insurance) where the growth was somewhat muted, he said.
TCS won seven large deals during the quarter, spread across verticals including retail, banking, life sciences and high tech. There are eight large deals in the pipeline, said Chandrasekaran. He observed that thus far client spends had been in line with the companys expectations and stressed that the opportunities were essentially around three initiativesgovernance, digital and simplification. The company said that pricing remained stable with the industry segments led by media and information services, life sciences, retail and telecom had done well and that non-BFSI verticals grew in excess of 5%.