In slow December quarter, TCS beats Infosys

livemint.com:

NEW DELHI, BENGALURU : Tata Consultancy Services Ltd grew faster than its closest rival Infosys Ltd in the December quarter, and beat profit estimates, although both the IT industry heavyweights are at risk of registering among their slowest pace of annual growth. At least one-third of TCS’s incremental growth in the third quarter was driven by a large contract it secured from state-owned telecom firm BSNL. Without including that, its performance was only a tad better than that of Infosys, which posted a third straight quarter of muted performance with both revenue and profit falling short of Street expectations.

Also, TCS, the country’s largest technology services company, and Infosys saw their combined workforce decline sequentially by 11,781 in the October-December quarter. The two companies together accounted for about one-fifth of the IT industry’s $245 billion revenue in FY2022-2023. On Thursday, TCS reported revenue of $7.28 billion for the seasonally weak third quarter, representing a 1% sequential increase from the July-September period and a 2.9% increase from the same period a year earlier.

It added $206 million in incremental revenue, of which $84 million came from its India business, a bulk of it from the BSNL contract. Net profit improved 2.7% sequentially, and by 7% from a year earlier, to $1.41 billion. Bloomberg, based on a survey of 24 analysts, had estimated TCS to report a profit of $1.38 billion on net sales of $7.23 billion for the third quarter.