HCL Tech leads Wipro, peers in weak December quarter
NEW DELHI, BENGALURU : HCL Technologies Ltd has emerged as the best performer among India’s top four IT services firms in the seasonally weak December quarter, heading into the final leg of what’s expected to be a slow financial year for the sector. Both HCL Tech and Wipro Ltd, which also reported quarterly numbers on Friday, beat market estimates, making Infosys Ltd the only one of the top four–the biggest being Tata Consultancy Services Ltd–to miss Street projections. Even so, Infosys, which announced its numbers on Thursday, as did TCS, saw the biggest single-day gain for its shares on Friday since July 2020 as its earnings turned out to be not as bad as analysts had feared.
Now that the industry heavyweights have announced their third-quarter earnings, analysts and at least some industry executives seem more hopeful of a revival in the sector in the coming financial year. HCL Technologies reported a 5.9% sequential growth in revenue from the July-September quarter to $3.42 billion, and a 12.5% increase in net profit to $522 million. Its operating margin improved 1.3 percentage points to 19.8%.
In comparison, Wipro’s lacklustre financial year continued with a 1.7% sequential decline in revenue to $2.67 billion on significant losses in its key business, including banking and financial services. The company surprised on its net profit, though, posting $323.9 million, a 1.7% increase from the preceding three months. Its operating margin, though, fell by 10 basis points sequentially to 16% in the December quarter.
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