Now that all top 5 Indian IT cos have reported their Q1 results, some interesting trends. 🧵based on recent earnings of TCS, Infosys, HCL Tech, Wipro and Tech Mahindra.
As expected, all 5 reported a decline in revenue compared to the previous quarter. This was largely expected because the full impact of Covid19 would kick in between April-June. The fall was lesser than expected in Infy's case. -2% vs -6-7% for the other cos.
Except TCS and HCL Tech, the rest manged to expand margins due to a combination of factors.. Travel costs came down, cost-cutting measures + forex gains. Infosys expanded margins by 1.5% while TCS margins were down by 1.5%
Commentary and deal wins were largely positive. They all expect the second half of the year to be much better as there is a accelerated shift to digital by clients in various sectors.
All 5 software firms all reported a sequential decline in the total number of employees in the same quarter for the first time due to lesser hiring and cost-cutting measures in the aftermath of Covid19.
For the April-June quarter, TCS' headcount went down by 4,786, Infosys by 3,138, HCL Tech by 136, Wipro by 1082 and Tech Mahindra by 1820. In all, 10,962 people left these software firms during the quarter.
Over 95% of employees continue to work from home.
TCS, Infosys, HCL Tech, Wipro & Tech Mahindra together had over 11.38 lakh employees on their rolls for the quarter ended June. A 95% average would mean 10.81 lakh employees are working from home, an incredible feat of execution
Not just the top 5. Cos like Mindtree, NIIT Tech, Persistent have also done well, making analysts wonder if the pessimism was overdone. IT stocks have been in demand in the last week. Q2 is expected to be better, has historically also been the best quarter for most cos. ENDS
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