Indian IT majors post modest profits in first quarter
Amid growing protectionism in US and other markets, Infosys and Tata Consultancy Services report muted growth
Amid growing protectionism in US and other markets, India’s software services companies are posting muted numbers for the first quarter due to squeeze on margins.
On Friday, India’s second largest software services company Infosys reported a consolidated net profit of Rs 34.83 billion (US$ 540.38 million) for the three months ending June 30, up 1.4% on the same time last year. However, on a sequential basis, its fell nearly 3.3% from the previous quarter profit of Rs 36.03 billion (US$ 560 million).
The earnings per share this quarter was Rs 15.23 against Rs 15.03 in the year-ago quarter and Rs 15.76 in the previous one.
The software major, however, kept its full year guidance, ending March 2018, between 6.5% and 8.5%. Bangalore-headquartered Infosys added eight clients in the $100 million-plus category during the quarter, reports Reuters.
Though Infosys was able to brave the adverse climate to some extent, the country’s market leader Tata Consultancy Services suffered a 6% fall in profit in the first quarter.
Consolidated net profit dropped to Rs 59.45 billion (US$ 923.20 million) in the three months to June 30, from Rs 63.18 billion (US$ 980 million), a year earlier, TCS said on Thursday. The appreciation of the rupee resulted in a loss of Rs 6.5 billion (US$ 10 million) in reported revenue, the company said in a statement.
Market analysts expect Indian IT firms to report muted growth due to wage hikes, visa curbs, stronger rupee and slower pace of large deal closures.