ECONOMY

Q1 IT Review: Deal Wins Aid Revenue For TCS To Wipro But Wage Hikes Bite

TCS—whose revenue grew 2.4% sequentially in constant currency terms—expects to deliver double-digit revenue growth in FY22, driven by ramp-up of deals, broad-based improvement in IT spending and traction in cloud, cyber security, analytics and enterprise application services.

Infosys has guided for revenue growth of 14-16% year-on-year in constant currency terms for FY22, from 12-14% previously, amid rising demand for digital transformation initiatives. The metric rose 4.8% over the last quarter in constant currency terms. It retained its full-year margin guidance at 22-24%.

HCL Tech maintained its FY22 outlook of double-digit revenue growth and 19-21% expansion in operating margin amid strong order bookings and continuous ramp-up on hiring that could aid normalised growth in the second half of the ongoing fiscal. Revenue, in constant currency terms, grew 0.7% sequentially.

Wipro has guided for sequential revenue growth of 5-7% in the quarter ended September, led by deal wins and impact of its acquisition of U.K.-based consultancy Capco. The company’s revenue grew 12% in constant currency terms amid better-than-expected growth from Capco and its consumer and E&U verticals. Organic growth was led by the consumer and communications verticals, while Capco drove BFSI growth. The company’s gearing for double-digit full-year growth, excluding Capco.

Deal Wins

TCS won total contracts worth $8.1 billion—rising 17% year-on-year—with wins spread across sectors and sizes. The BFSI segment chipped in with $2.2 billion, while the North America market contributed $4 billion. The company expects the deal momentum to continue in the foreseeable future.

Infosys won deals worth $2.6 billion, up 86% over the same period last year. The company said the ramp-up in the number of deals provides strong visibility for FY22.

HCL Tech reported new deal wins worth $1.7 billion—a 37% increase over the same period a year ago. That includes eight large service deal wins and four product wins. The company said its deal pipeline was robust, especially in the services, and products and platforms segments.

Wipro disclosed a total contract value of $715 million, down 49% over the last quarter, amid lack of mega deals. The company has added TCV wins of about $8 billion in the last nine months, data for which is available since the third quarter of FY21. This, the company said, sets it up for double-digit organic growth in FY22.

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