India Inc is all set to release its third quarter earnings starting this week, with majors like TCS and Infosys scheduled to report their quarter numbers on Thursday (January 11) and HCL and Wipro on Friday (January 12). According to experts and analysts, the December quarter earnings of Indian corporates are unlikely to throw a negative surprise even as there could be some sequential moderation in some sectors due to high base and sectoral headwinds. Per Nuvama Wealth Management, Nifty earnings may grow 10 per cent year-on-year (YoY) in Q3FY24 and are likely to moderate further in Q4FY24.
Further, another report by ICRA said that credit metric of India Inc is expected to show slight sequential improvement in Q3FY24, with interest coverage increasing to 4.5-5.0 times in Q3FY24 from 4.5 times in Q2FY24. This would benefit from improved earnings of Corporate India, on the back of continuing, albeit moderating tailwinds from commodity prices and seasonally strong demand during the recently concluded festive season, it added. Kinjal Shah, Vice President & Co-Group Head – Corporate Ratings, ICRA Limited, said, “The 1.6 per cent YoY and 0.1 per cent sequential revenue growth for Corporate India in Q2 FY2024 was supported by steady demand; however, the YoY revenue expansion was curtailed to an extent due to a general decline in the realisation levels amidst softening of input costs for most of the sectors. While consumer and infrastructure-oriented sectors supported the expansion, commodity-oriented sector revenues contracted following price correction from the unprecedented levels in the recent past. “
IT companies, meanwhile, are expected to report a ‘soft’ third quarter with higher-than-usual furloughs weighing on revenue growth. According to BNP Paribas, Q3 is expected to post muted revenue growth for tier-I IT service companies and mixed trends for tier-II companies in a seasonally soft quarter due to weak macros, furloughs, higher deal scrutiny and decision-making delays. “We expect q-o-q constant currency (cc) revenue growth of -2.5- 4.4 per cent for tier-I Indian IT service companies and 0.9- 5 per cent CC revenue growth for tier-II IT companies. Cross- currency impact is expected to be marginal for most IT companies.
The big earnings week for tech majors is up ahead, with the top tier IT companies slated to announce their December quarter numbers this week. Some of the major and awaited company results this week include the following:
Tata Consultancy Services (TCS): TCS will release its December quarter earnings on Thursday (January 11). TCS had, in the previous quarter, posted profit at Rs 11,380 crore, up 8.7 per cent in comparison to Rs 10,465 crore during the same period last year. The revenue from operations was at Rs 59,692 crore, up 7.9 per cent as against Rs 55,309 crore during the second quarter of FY23. The company had also announced the second interim dividend of Rs 9 per equity share of Re 1 each of the company. The performance, it had stated, was driven by strong deal momentum with the order book at $11.2 billion. It said that the book to bill ratio was 1.6. The IT services company had said that growth was led by the UK (+10.7 per cent YoY), Energy, Resources and Utilities (+14.8 per cent) and Manufacturing (+5.8 per cent).
Infosys: Infosys is also slated to post its third quarter numbers on Thursday (January 11). During the previous quarter, Infosys had recorded profit at Rs 6,212 crore, up 3.2 per cent as against Rs 6,021 crore during the same period last year. The IT giant posted revenue from operations at Rs 38,994 crore, up 6.7 per cent in comparison to Rs 36,538 crore during the second quarter of FY23. Infosys had also declared an interim dividend of Rs 18 per equity share. Infosys had stated that it delivered $4,718 million in Q2 revenues with year-on-year growth of 2.5 per cent and sequential growth of 2.3 per cent in constant currency. Large deal TCV for the quarter was $7.7 billion, with net new of 48 per cent. Operating margin for the quarter increased by 40 bps sequentially to 21.2 per cent. Infosys had also revised the FY24 revenue guidance to 1.0-2.5 per cent and operating margin guidance was retained at 20-22 per cent.
HDFC Asset Management Company: Another major company to post its Q3 earnings on Thursday (January 11) is HDFC Asset Management Company. The company had posted profit for the second quarter of FY24 at Rs 436.52 crore, up 20 per cent in comparison to Rs 363.85 crore during the same period last year. It posted revenue from operations at Rs 643.08 crore, up 18.1 per cent as against Rs 544.72 crore during the second quarter of FY23. Quarterly Average Assets Under Management (QAAUM) grew to Rs 524.70 thousand crore in Q2FY24 as compared to Rs 429.30 thousand crore for the quarter ended September 2022. QAAUM, up 8.1 per cent on a sequential basis.
HCL Technologies: HCL Technologies will release its Q3 numbers on Friday (January 12). The IT firm had posted its fiscal second quarter earnings with profit at Rs 3,832 crore, up 9.8 per cent in comparison to Rs 3,489 crore during the same period last year. The growth in profit was driven by a robust deal momentum even as larger macroeconomic weakness persisted in the IT sector. It posted revenue from operations at Rs 26,672 crore, up 8 per cent as against Rs 24,686 crore during the second quarter of FY23. “Q2 FY24 growth at 8 per cent YoY (in INR) is accompanied with sharp uptick in margins and deal wins, as well as great cash generation. EBIT margins increased to 18.5 per cent, an increase of 50 bps YoY, 154 bps QoQ,” Prateek Aggarwal, Chief Financial Officer, HCL Tech, had said in an exchange filing. The company had also revised its FY24 revenue guidance in constant currency terms to 5-6 per cent YoY. Previously it was 6-8 per cent.
Wipro: Bengaluru-based IT giant Wipro will post its Q3 earnings on Friday (January 12). Wipro had posted its second quarter profit at Rs 2,646.30 crore, down 0.5 per cent as against Rs 2,659.00 crore during the same period last year. It posted revenue from operations at Rs 22,515.90 crore during the quarter ended September 2023, down 0.1 per cent in comparison to Rs 22,539.70 crore during the quarter ended September 2022. Wipro had also cut the guidance of -3.5 per cent to -1.5 per cent in constant currency terms. Earnings per share for the quarter, it had said, was at Rs 5.06, posting an increase of 4.1 per cent YoY. Its operating cash flows at 145 per cent of net Income for the quarter was at Rs 3860.00 crore.