India’s top IT companies report mixed performance in third-quarter results

India’s top IT companies—Infosys, Tata Consultancy Services (TCS), Wipro, HCL Technologies and Tech Mahindra—have delivered their earnings for the October to December quarter (Q3FY25), revealing a mixed bag of performance in key metrics such as revenue growth, margins, workforce trends, and deal activity. While some companies showed resilience, others faced challenges amid a volatile global market. Here’s a closer look at how each of these industry leaders performed.

Revenue growth: Mixed results across the board

On a quarter-on-quarter basis, the performance in revenue growth was varied. HCL Technologies led the pack with a 3.8% revenue increase, driven by the seasonality in its products business, though the growth fell short of expectations. Wipro, on the other hand, surprised analysts by posting positive growth, defying the anticipated decline. TCS reported flat revenue growth, in line with expectations, while Infosys achieved 1.7% growth. However, this growth was partly driven by non-recurring pass-through elements that are unlikely to be sustained in the coming quarter.

Margin expansion: Positive outlook despite challenges

Margin performance across the top IT firms showed an overall positive trend. Despite the challenges posed by wage hikes, Wipro expanded its margins by 70 basis points, signaling strong operational efficiency. Tech Mahindra continued its streak of margin expansion, while TCS stood out with the highest EBIT margin of 24.5%. Overall, the industry has shown a commendable ability to improve profitability, even in the face of global uncertainties.

Workforce trends: Headcount fluctuations and rising attrition

The workforce data presented a mixed picture. TCS and Wipro reported a reduction in headcount, a reflection of ongoing efforts to optimise operations and improve cost efficiency. Meanwhile, Infosys and HCL Technologies continued to expand their workforces, possibly in anticipation of greater demand in the upcoming quarters.

Attrition rates, while still within manageable levels, have been creeping up. TCS reported an increase in attrition to 13.5%, up from 12.1% two quarters ago, while Infosys saw its attrition rise to 13.7%, from 12.6% three quarters ago. Despite this upward trend, most companies remain unfazed, viewing it as a sign of increased demand for talent in the industry, which they believe is a healthy indicator of recovery and growth.

Deal wins and market outlook: TCS leads the way

In terms of deal activity, TCS emerged as a clear frontrunner, securing significant deal wins exceeding $10 billion, including both new and renewal contracts. Management expressed optimism about the future, projecting a better FY26 than FY25, citing strong demand across various sectors. Other IT giants also shared positive sentiments, particularly in relation to discretionary demand, with an optimistic outlook for the BFSI (Banking, Financial Services, and Insurance) sector. The overall sentiment suggests that the industry remains poised for steady recovery as client budgets stabilise and discretionary spending picks up.

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