TCS has raced past Infosys for the third successive quarter in terms of volume growth. In fact, the gap is wider this time. While Infosys posted a volume growth of 7% in Q2, TCS reported 11% growth. ?Overall, the TCS numbers are ahead of our expectations. TCS has been consistently outperforming Infosys over the last three quarters in terms of volume growth,? said Rajiv Mehta, senior IT analyst with India Infoline (IIFL). The next two quarters, he added, could see a seasonal slowdown for the IT services industry. ?But when compared to Q3 of last year, the growth will be significantly better in the December quarter,? he predicted.
TCS’ growth is impressive because it is spread across verticals, Vihang Naik, analyst with MF Global, told FE. ?The outlook for hiring for the rest of the quarters is good too. Things are working out for TCS but the firm may have to do more in the coming quarters to maintain Q2 growth rates,? he added.
TCS’ Q2 results point to a robust off-shoring environment, analysts said. Q3 is a historically softer quarter and Q4 inconsistent due to the IT budgeting cycle, but analysts are still upbeat about the prospects of Indian IT firms due to strong impetus shown. Indian services firms, overall, appear to have managed headwinds like salary inflation and the negative effects of protectionism well enough, analysts added.