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This is an exciting day for the business community as the country's largest IT service provider, TCS, and the second largest IT services company, Infosys, will announce the annual results on Friday.
The two IT managers announced the results for the first time on the same date, TCS, based in Mumbai, postponed its results this time. Traditionally, TCS announced the results in front of Infosys, second.
DH brings you key elements to watch for in each company's results:
TCS:
Outlook and visibility for double-digit growth: In the first three quarters of the current fiscal year, the IT division recorded double-digit revenue growth. However, in the fourth quarter, it should record growth of more than 10%, its quarter to quarter being low compared to the third quarter. Most TCS pockets are fine, with the exception of the automotive and high tech industries
Outlook, in view of the global slowdown, is an interesting thing to watch for the company.
Commentary on BFSI: Banking and Financial Services Institutions (BFSI) – a key vertical for all Level 1 Indian IT firms, the turnaround led TCS 'robust start to fiscal year 19. Its vertical growth accelerated 4, 1% from one year to the next during the first quarter of fiscal year 19 – bringing the major of computing to double-digit growth.
Path margins: Despite quarterly RIN appreciation of 1.3%, EBIT margin estimate of 25.8% is 20 basis points higher than Q-on-Q, then that the pressure exerted by subcontractors has eased.
Infosys:
Orientation on revenues and margins: Infosys saw its operating margin reach its lowest level in ten quarters in December 2018. It would be interesting to note how Infy sees its future margins for the current fiscal year. It is expected that the company will move to a margin range of 7 to 9% for fiscal 2003 and 21 to 23% for EBIT (100 basis points lower).
Deal wins: Over the past few quarters, Infosys posted very good results in terms of contracts: the company earned $ 2 billion in business in the second quarter and $ 1 billion in the first quarter. It would be interesting to see what the company has in reserve in terms of winning contracts.
Level of attrition: Attrition has been a major problem with Infosys. After reaching an alarming level of about 21% in the second quarter of last year, it has been able to recover it instead of improving incentives for employees. But since, historically, we have seen an increase in attrition rates in the fourth quarter, we could end up seeing even more during the quarter.
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