&w=3840&q=100)
India's top IT services firms wrap up Q1 with single-digit topline growth
Management commentary painted a mixed picture, caution prevailed, yet industry CEOs also emphasised cost optimisation, vendor consolidation, and opportunities in AI makeovers.
An overview of Q1 report cards of Indian IT giants shows year-on-year revenue growth ranging from 0.8 per cent (for Wipro) to 8.1 per cent (HCL Technologies).
Axis Securities, while penning its results review on Infosys, noted that overall the business environment remains uncertain due to unresolved tariffs and geopolitical issues, prompting clients to be cautious with discretionary spending, and delaying decision-making.
Nuvama Institutional Equities expects the demand environment to remain challenging for the next one-two quarters due to macro uncertainty.
"However, we remain positive on medium-to-long-term outlook, as technology debt is very high for enterprises, which will warrant revival in spending as macro improves," Nuvama said in its report post-Infosys' results, that concluded the Q1 earnings season for Tier-1 IT services firms.
TCS' revenue rose 1.3 per cent year-on-year to Rs 63,437 crore, while bottomline improved 5.9 per cent to Rs 12,760 crore.
TCS MD and Chief Executive K Krithivasan said the company is experiencing a "demand contraction" due to the continued uncertainities on the macroeconomic and geopolitical fronts, and added that he does not see a double-digit revenue growth in FY26.
Krithivasan explained the delays in decision-making experienced in the preceding quarter have "intensified" now, and hoped for the discretionary spends -- a prime mover of revenue growths for IT companies -- would return once the uncertainities ebb.
For Bengaluru-headquartered Infosys revenue was up 7.5 per cent to Rs 42,279 crore, while net profit at Rs 6,921 crore translated into an 8.6 per cent growth.
Wipro's topline grew 0.77 per cent in Q1 to Rs 22,135 crore but its profit rose at a faster 9.8 per cent clip to Rs 3,336.5 crore.
On a positive note, Infosys secured large deals worth USD 3.8 billion and raised the lower end of its FY26 revenue growth guidance to 1-3 per cent, from 0-3 per cent earlier.
Infosys CEO Salil Parekh, however, expressed caution and said while the economy worldwide has come to more stable situations, "it is not fully settled". Industries such as logistics, consumer products, and manufacturing were impacted by economic changes in the economic environment, the company's management said.
Clients are reportedly highly focused on cost and efficiency, reflecting ongoing caution influenced by the macroeconomic setting.
Wipro CEO and MD Srinivas Pallia said the first quarter of the fiscal faced significant macro uncertainty, which kept the overall demand muted. Wipro's clients prioritised initiatives with immediate impact, focusing on cost optimisation and vendor consolidation. At the same time, they accelerated their AI, data and modernisation programmes.
Pallia also noted that discretionary spend is not uniform and is coming back only in certain pockets.
Wipro's IT services segment, which forms the core of its business, generated Rs 22,080 crore in during the quarter under review, a marginal year-on-year growth of 0.8 per cent and a sequential decline of 1.6 per cent. The company has given a sequential guidance of -1 per cent to 1 per cent in constant currency terms.
HCL Technologies' (HCLTech) revenue was 8.1 per cent higher at Rs 30,349 crore but profit fell 9.7 per cent to Rs 3843 crore year-on-year, hurt by higher expenses and one-time impact of a client bankruptcy.
The Noida-headquartered IT firm, however, raised the lower end of revenue growth outlook for the full fiscal year on booking expectations in the coming quarters.
CEO C Vijayakumar said the June quarter was historically the weakest for the company, although the environment, with some variations, mainly remained stable and did not deteriorate as feared at the start of the quarter.
Tech Mahindra clocked 2.65 per cent revenue growth to Rs 13,351.2 crore, its profit 33.9 per cent higher at Rs 1,140.6 crore.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
10 minutes ago
- Indian Express
Trump says he ‘heard' India is no longer going to buy oil from Russia, calls it ‘good step'
US President Donald Trump on Saturday said he has heard that India is no longer going to buy oil from Russia, which he hailed as a 'good step' but added that he wasn't sure about the development. 'Well, I understand India no longer is going to be buying oil from Russia. That's what I heard. I don't know if that's right or not, but that's a good step. We'll see what happens,' Trump told reporters Friday. Trump's comments come a day after the White House announced tariffs the US will impose on exports from about 70 nations. According to the executive order, India will face tariffs of 25 per cent, but it did not mention the 'penalty' that Trump had said India will have to pay because of its purchases of Russian military equipment and energy. Ministry of External Affairs Spokesperson Randhir Jaiswal was asked at the weekly media briefing on Friday about the reports claiming that Indian oil companies have stopped buying oil from Russia in the past week. Jaiswal responded that as far as sourcing India's energy requirements is concerned, 'we take decisions based on the price at which oil is available in the international market and depending on the global situation at that time. As for the specifics of your particular question, I am not aware of it. I don't have details of these specifics.' Declaring that the US has a massive trade deficit with India, Trump had said that while 'India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any country. 'Also, they have always bought a vast majority of their military equipment from Russia, and are Russia's largest buyer of energy, along with China, at a time when everyone wants Russia to stop the killing in Ukraine — All things not good!' Trump said. He said that India will therefore be paying a tariff of 25 per cent, plus a penalty for the above, starting on August 1. Trump had also mounted a sharp attack on India and Russia for their close ties and said that the two countries can take their 'dead economies down together.' 'I don't care what India does with Russia. They can take their dead economies down together, for all I care. We have done very little business with India, their Tariffs are too high, among the highest in the World. Likewise, Russia and the USA do almost no business together. Let's keep it that way…' Trump had said in a post on Truth Social.
Time of India
10 minutes ago
- Time of India
From shopfloor to C-suite: Mahindra offers Diwali Esops to 14,000 employees
The Mahindra Group has announced a one-time employee stock ownership plan (Esop) grant for 12,000-14,000 employees, including shop floor workers for the first time ever. The move across three core companies—Mahindra & Mahindra (auto and farm sector), Mahindra Electric Automobile and Mahindra Last Mile Mobility —comes amid surging sales and profit on the back of hit products such as the Thar driving the M&M stock up more than 12 times in five years. Mahindra has also overtaken Hyundai to become the country's second biggest manufacturer of passenger vehicles, thanks to its range of SUVs. The Esops will help broad-based wealth creation, the tractor-to-technology conglomerate said in an internal circular. ET has seen the note. It did not reveal how many shares the group will earmark for this purpose, but people in the know estimate the total outflow to be in the range of ₹ 400-450 crore. While granting Esops to keep employees motivated is not unusual, this could be the first time a large Indian conglomerate extends these benefits to shopfloor workers. The Esops, structured as restricted stock units (RSUs). Productivity Boost? The grant is being positioned as a reward for long-term contribution and a tool to align employees with value creation. 'This special grant reflects the organisation's appreciation for your efforts, makes you a co-owner of this enterprise, and gives you a share in the value that you have helped co-create,' said Anish Shah, group chief executive and managing director of M&M, in a note to employees. Rajiv Agarwal, department chair for strategy at leading B-school SPJMR, said with this move, Mahindra is fostering a productive environment, where labour participation drives higher overall productivity. 'This approach not only supports the company's growth but also allows employees to benefit from the rise in the stock price,' Agarwal said. 'It's a smart strategy — compensating workers not just with their salaries for the hours they work, but also rewarding them when the company does well. This dual benefit truly aligns employees' interests with the company's success.' The Esop scheme comes on the back of a sharp surge in valuations of Mahindra Electric and Mahindra Last Mile as well. Both have seen over 10x growth in the past five years, supported by strong execution, strategic focus and new business momentum. M&M's shares closed at ₹ 3,160 on the BSE on Friday, down 1.35 per cent from its previous close. Its market cap stood at ₹ 3,92,925 crore. The Esop shares will be granted to employees on permanent payrolls with at least 12 months' tenure in the group as of the announcement date. Depending on their income tax bracket, the beneficiaries may have to pay tax on the profits they make when they sell their Esop shares. However, shopfloor workers who earn below the taxable income limit won't have to pay any tax on these gains. The Mahindra Group communication credited executive chairman Anand Mahindra and executive director Rajesh Jejurikar for steering the transformation, while thanking employees' families and retired leaders for their support.
New Indian Express
10 minutes ago
- New Indian Express
Hi-tech dairy plant in Namakkal set to be operational by January 2026
NAMAKKAL: Construction of a Rs 90-crore hi-tech dairy plant in Namakkal has reached 80% completion, marking a major step toward boosting milk production and supply in the region. Once operational, it will have the capacity to handle 2 lakh litres of milk per day, making it one of the most modern and high-capacity dairy units in Tamil Nadu. The project is being implemented with the support of the National Dairy Development Board (NDDB). Officials have confirmed that, alongside the civil construction, 90% of the required machinery has been procured, and 40% has already been installed on-site. Trial operations are scheduled to begin in November 2025, and the plant is expected to become fully operational by January 2026.
