BENGALURU: Despite mixed results for the fourth quarter of FY2023-24, India's top five IT companies have expressed positive outlook for their FY25 operations. Sector flagship Tata Consultancy Services expects improvement in the second half of FY25, while Tech Mahindra expects growth to return from the first quarter onwards.
“We believe this year will be better than last year…the fourth quarter marks the end of our annual growth trajectory,” Tech Mahindra Managing Director and CEO Mohit Joshi said in a post-earnings press conference. “I'm very confident that it's going to be the lowest point.” Press conference.
However, while the occupancy rate remained in a comfortable range of 85% in the January-March period, it is unlikely to return to 2019 hiring levels in FY2025, industry experts said. DH. The total number of employees in the top five IT service companies decreased by 69,167 in FY2024.
At the same time, all players in the top five groups agreed that macroeconomic indicators continue to bring uncertainty. “I think FY25 will be another year of strength from both the demand and supply sides,” said C. Vijayakumar, managing director and chief executive officer, HCL Technologies.
Manpreet Singh Ahuja, Chief Digital Officer, PwC India, said: “The recovery of India's IT services sector is closely tied to the health of global markets, particularly the US, which accounts for a significant portion of these companies' revenues. ”, he emphasized.
“Looking forward, we expect performance to improve in FY25 compared to FY24. By the end of FY25, uncertainty will decrease following the end of the election and the Federal Reserve's decision to cut interest rates. “We expect the sentiment to change positively,” Ahuja added. However, he noted that despite these positive trends, the chances of achieving double-digit revenue growth this fiscal year remain low.
How did the Big 5 perform in the fourth quarter?
TCS posted a consolidated net profit of Rs 12,434 crore in the fourth quarter, beating Dalal Street's expectations and increasing 9% from Rs 11,392 crore in the year-ago period.
The sector leader also closed deals worth $13.2 billion during the quarter, taking its overall order book for the full year 2023-24 to a record $42.7 billion.
Meanwhile, Tech Mahindra was at the bottom of the band with a 40.9% year-on-year decline in net profit to Rs 661 million in the fourth quarter.
Much to the disappointment of industry players, both Infosys and HCL Tech gave subdued FY25 revenue growth estimates of 1-3% and 3-5%, respectively, for the current financial year. At the same time, Bangalore-headquartered Wipro expects future revenue growth to be in the range of -1.5% to +0.5% on a constant currency basis.
In terms of new hires, the FY25 target mirrors the previous fiscal year targets for both TCS and HCLTechnologies. The former is his plan to recruit 40,000 new graduates, while the latter will be on campus during the entire financial year to recruit some of his overall goal of more than 10,000 trainees.
Ramachandran Sundararajan, HCL's chief human resources officer, said in a post-earnings press conference that contract employment, along with hybrid work models, will continue to be a tactical approach, adopted on an as-needed basis. He said he was deaf.
Meanwhile, Tech Mahindra has a target of inducting 6,000 new students a year and Wipro aims to honor past offer letters before returning to universities.
“It's probably going to be a different type of curve than what we've seen in the past…The jobs of the future will be different, and the number of people IT companies and their customers will need for those roles. said Shantanu Rooj, Founder and CEO, TeamLease EdTech.
In FY24, except HCL Technologies, all the top five companies reported a decline in the number of employees on both sequential and annual basis. Their total number of employees decreased by 4.3% to 1,525,776 in FY 2023-24 as compared to 15,94,943 in FY 2023.
(issued April 29, 2024, 01:05 IST)
