TCS, Infosys retain deal momentum amid a challenging scenario
TCS and Infosys reported a sustained new deal momentum during the seasonally weak December quarter amid economic uncertainties in key markets of the US and Europe.
In addition, each of the companies continued to show lower employee attrition and falling headcount which reflects the muted demand outlook in the short term despite fresh deal wins.
The contrasting trend owes to the shift in the client preference over the past few quarters in favour of improving cost efficiency of existing processes and reduced focus on long term transformational projects. As a result, the top lines of the companies continue to show lacklustre trend despite continued large deal momentum.
The situation may take a few more quarters to change.
The current scenario has affected the year-on-year pace of revenue generation over the past seven quarters based on the trailing 12-month (TTM) analysis.
For TCS, the TTM revenue growth slowed to 5.4% in the latest December quarter from 15.6% in the corresponding quarter two years ago, which had the benefit of a low base in the December 2020 quarter due to the impact of the Covid pandemic.
In the case of Infosys, TTM revenue growth decelerated to 3.4% in the December 2023 quarter from 19% in the December 2021 quarter.
The year-on-year revenue growth for the nine months to December 2023 was in single digit at 4.8% and 2.5% for TCS and Infosys, respectively.
TCS reported $ 8.1 billion in new deals compared with $ 7.8 billion a year ago while for Infosys, it was $ 3.2 billion compared with $ 3.3 billion in the year-ago quarter.
Both TCS and Infosys had reported an exceptional size of new deals worth $ 11.2 billion and $7.7 billion in the previous quarter in that order.
Infosys tweaked its FY24 revenue
