TCS, Infosys, Wipro and HCL Tech To Expect Better Earnings in 2020; Focus on 3 Factors - Report!   

In the first quarter of this fiscal year, there are three things that has kept any IT services firm strong; new deals, strong profit margin, and the strength of its employee pool, which are both in terms of skills and numbers. 

Keeping in mind these factors, India’s top tech firms like Infosys, HCL Tech and Wipro have shown great results on all these accounts while, TCS fared just as well on everything except the margin. 

As per Business Insider, a report by brokerage and research firm Motilal Oswal, five of the seven Indian IT companies, analysed have seen an earnings upgrade of at least 10 percent based on the factors mentioned above. Getting into details, Infosys has the biggest scalp that may be the Vanguard deal, which is yet to be finalised. 

To which Times of India (ToI) stated that this deal is reportedly going to be worth $1.5 billion. Also, the scope of the work could last 10 years with the total contract value could exceed $2 billion. Coming to Tata Consultancy Services (TCS), some of the largest deals came from communication, media and information, as per the CEO Rajesh Gopinathan.

Amid this pandemic, HCL Tech had a different experience by bringing in close to 11 new deals in the last three months. Even the clients preferred to opt for fewer or cheaper services. “We believe the primary factor for consistent pressure is due to a delay in both projects renewal and ramp-up of new projects,” said ICICI Securities.  

Meanwhile, Wipro had just two new deals during the last few months. The company is also having a lot of hope on its new CEO, Theirry Delaporte, who is focused on ‘profitable growth’. Soon after his arrival, he highlighted that cloud and other digital technology is expected to accelerate in the future and will be the key focus of the company, Business Insider further reported.

Further in the report by brokerage and research firm Motilal Oswal, it asserted that everyone managed to expand margins except TCS, Infosys, along with Wipro, Mindtree and L&T Infotech also witnessed sequential margin expansion.

Amid these difficult times, most Indian IT companies have decided to suspend hiring or go slow during April through to June. “IT firms managed to shift to remote operations with agility, which has been well received by global clientele,”  said Motiwal Oswal Securities.