Q1 Results: This Is How TCS, Infosys, Wipro & Tech Mahindra Fared This Quarter While TCS, Wipro & Infosys net profit grew in the first quarter, Tech Mahindra's net profit fell considerably
By Shrabona Ghosh •
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Major IT players such as Tata Consultancy Services, Infosys, Wipro and Tech Mahindra, presented their first-quarter results. While total contract value, large deals, robust client additions and resilient margins helped TCS, Wipro and Infosys in clocking net profit, global macroeconomic headwinds pushed Tech Mahindra towards a slump in net profit.
TCS
Tata Consultancy Services (TCS) reported a 16.8 per cent increase in net profit on a year-on-year (YoY) for the quarter ended June 2023, backed by a strong growth in total contract value (TCV) deal.
Consolidated revenue for the quarter stood at INR 59,381 crore, marking an on-year surge of 13 per cent. In constant currency terms, the revenue grew by 7 percent YoY, the company said in a release. "We remain confident in the longer-term demand for our services, driven by the emergence of newer technologies. We are investing early in building capabilities at scale on these new technologies, and in research and innovation," TCS chief executive officer K Krithivasan said in the statement.
The company's order book at the end of Q1FY24 stood at $10.2 billion. "We are proactively building differentiating capabilities in generative AI and actively working on such projects with our clients, delivering impact on technology, operations and client experience dimensions," added N Ganapathy Subramaniam, chief operating officer, TCS.
Infosys
Infosys said its net profit grew 10.9 per cent year-on-year (YoY) to INR 5,945 crore for the June quarter compared with INR 5,360 crore in the same quarter last year. Salil Parekh, CEO and MD attributed the growth to large deals, "We had a solid Q1 with a growth of 4.2 per cent and large deals of $2.3 billion helps us to set a strong foundation for future growth."
Net sales rose 10 per cent YoY to INR 37,933 crore from INR 34,470 crore in the corresponding quarter last year. Operating margin for the quarter stood at 20.8 per cent and revenue stood at $4,617 million. "Our generative AI capabilities are expanding well, with 80 active client projects. Topaz, our comprehensive AI offering, is resonating well with clients. We see this being transformative for clients and enhancing our overall service portfolio. We have expanded the margin improvement program with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by our leadership team", he added.
Wipro
IT services firm Wipro reported 11.9 percent year-on-year (YoY) growth in net profit in the first quarter ended June 2023. Wipro's consolidated net profit for Q1FY24 stood at INR 2,870 crore, the company attributed the growth to large deal bookings, robust client additions and resilient margins. However, the sequential net profit was down by 6.6 per cent.
Revenue for the quarter grew 6 per cent YoY at INR 22,831 crore as compared with INR 21,528 crore in Q1FY23.
"Wipro's first quarter results come with a strong backbone of large deal bookings, robust client additions, and resilient margins. The launch of Wipro ai360 and the USD 1 billion investment solidifies Wipro's position as a leading transformation partner that delivers the results and innovation our clients need to future-proof their businesses," said Thierry Delaporte, CEO, Wipro.
"Our ongoing focus on operational improvement has ensured that margin remains steady even in a softening revenue environment. Our operating margin for the first quarter was 16 per cent, an expansion of 112 basis point YoY. We generated strong operating cash flows at 130 per cent of our net income for the Quarter. EPS for the quarter grew by 11.5 per cent YoY," said Jatin Dalal, CFO, Wipro.
Tech Mahindra
Tech Mahindra reported a 39 per cent slump in first-quarter profit. The consolidated net profit for the quarter ending June 30 stood at INR 693 crore. Sequentially, the decline was 38 percent, as compared to the net profit of Rs 1,125 crore reported in the fourth quarter of the last fiscal year. The revenue fell by 4 per cent sequentially to INR 13,159 crore. The company's new deal wins also witnessed a significant drop, falling to $359 million from $802 million in the previous year.
CEO and MD CP Gurnani said in a statement that the company's numbers this quarter reflects the uncertainty in the global economy and the IT sector, "We are confident that we have the right strategy and the right team to overcome this temporary setback and deliver longterm value for our customers and shareholders."
"This quarter was a challenging one for us as revenue growth faced strong headwinds and that had an impact on profitability. We have taken swift and decisive actions to address these issues and improve our execution," said CFO, Rohit Anand.
