Top IT companies boost margins amidst market struggles

economictimes.indiatimes.com:

Tata Consultancy Services (TCS), Infosys, HCLTech and Wipro are increasing their profitability as the elbowroom to expand revenues appears rather constricted. TCS, the leader of the pack and the only tech company to feature in the list of global top 100 by market capitalisation, sequentially widened its operating margins by 110 basis points to 24.3%.

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One basis point is a hundredth of a percentage point.

Infosys, the second-biggest in the business locally, said its margins for the quarter stood at 21.2%, up 40 basis points over the past quarter. Similarly, third largest firm HCLTech’s operating margin for the July-September quarter was 18.5%, compared with 17% the prior quarter and 18% a year earlier.

To be sure, Infosys, HCLTech and Wipro have slashed their revenue guidance for the upcoming quarter and full fiscal amid a freeze on tech spends and delay in decision making. The FMCG industry, often faced with competition and maturity in key micro-markets and product categories, often has to harness the profitability lever to ride out business cycles that often cause volume growth to stagnate.

Experts said that companies are using this downturn to go back to the basics on cost management and are increasing employee productivity to squeeze out better margins without growth.


ET reported on Monday that some of the biggies of India’s $245-billion IT industry may be staring at their slowest growth ever.

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