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5 things to learn from Infosys, TCS results

Publish date: 19th October, 2018

Recently, two of the IT biggies, Infosys and TCS announced their Q2 results. Both, Infosys and TCS have done well in the September quarter. Infosys has an edge over TCS in terms of the speed of growth. However, TCS has been reporting a double-digit year-on-year (yoy) growth for 3 straight quarters. Thus, you can say that TCS has an edge over Infosys if the yoy growth is considered. Here are key takeaways for an investor, from Infosys and TCS Q2 results. Click here to read more about these IT giants.

Rupee depreciation

IT companies are the biggest winners during rupee depreciation. Rupee depreciation against the dollar would result in a rise in revenue. This is because most IT companies earn in foreign currencies. However, the results show that both the companies have not gained much from rupee depreciation.

Click here to read more about the positive side of rupee depreciation.

Revenue growth

For Infosys, revenue from operations grew more than 17%, for the September quarter. Decent revenue growth was witnessed in terms of year-on-year (8.1%) and quarter-on-quarter (4.2%) basis. The company’s top 25% clients accounted for 34.7% of its revenue, for the quarter.

TCS also delivered a healthy revenue growth for the September quarter. The IT giant’s revenues rose by 11.5% from last year’s corresponding period.

Click here to know more about reading the quarterly results of IT companies.

High attrition

Employees are the biggest strength for any company. High attrition means a large number of employees are leaving the firm. High attrition always has a negative impact on a company’s growth. The attrition rate for Infosys has remained sticky for various levels. Infosys is facing higher attrition when compared with last year’s figures. To tackle this problem, Infosys is using a mix of financial incentives and soft factors.

Click here to know about the attrition problem in the IT sector.

Stock market reactions

Every investor closely monitors a company’s results. Even a slight miss in meeting growth and profit expectations can hurt investor sentiments. Shares of both the companies witnessed an upward trend after the announcement of results. This was mainly due to positive investor sentiments regarding future growth in the IT sector.

Click here to know more about market volatility

New deals

Getting new clients and projects is very important for any services sector industry. Getting new large deals is just like the cream on the cake.

For the first time in history, Infosys won fresh deals worth $2 billion. This was one of the highlights of Q2 results. TCS has also bagged 5 mega deals with a total contract value of $8.8 billion, for the year.

Large deal wins result increased revenue from new clients. This raises investor’s expectations regarding the future growth of the company. Click here to know more about Infosys Q2 results.

- TCS or Infosys: Which is a better bet post Q2 results? Read more
- Infosys Gains As Analysts Cheer $2-Billion Contract Wins Read here

$2 billion

One of the key highlights of Infosys Q2 results was its fresh deals. Infosys, for the first time in history, registered the highest total contract value worth $2 billion. This demonstrates the company’s increased client relevance. Increase in new deals will translate into growth in the company’s revenue, over the next several quarters.

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