In Charts: How India’s Two Largest IT Companies Fared In Second Quarter
Tata Consultancy Services Ltd. and Infosys Ltd.’s key financial services vertical continued to recover in the U.S., the biggest market for two of India’s largest software services providers.
The information technology companies reported earnings in line with expectations in the quarter ended September. TCS was helped by a weaker rupee, while Infosys lost that advantage because of higher employee and sub-contractor costs.
Here’s a look at how the two software services providers fared on each parameter:
TCS’ quarterly revenue growth in constant currency terms was in line with estimates. Infosys, on the other hand, not only beat estimates, but its revenue was also higher than its larger peer.
TCS got a boost from a weaker rupee as it bills majority of the U.S. and overseas clients in dollars. Infosys, however, failed to benefit because of higher employee expenses.
TCS’ margin expanded 150 basis points to 26.5 percent—the highest in seven quarters—in the July-September period. Infosys’ margin remained flat sequentially at 23.7 percent against an estimate of 24.4 percent.
While the financial services segment—which makes up for almost a third of revenues—recovered for both the tech majors, Infosys logged in higher growth than TCS, sequentially.
Infosys pipped TCS in the North American market even as they continue to face headwinds like visa curbs, slower client spending and shift towards automation.
Both companies continued to make investments in the digital space. Share of digital services like cloud computing, automation and analytics increased in the companies’ revenue pie.