Bengaluru: The mixed set of financial results for the fourth quarter offinancial year 2023-24 notwithstanding, the top-5 Indian IT companies expressed a positive outlook for business in FY25. Sectoral bellwether Tata Consultancy Services expects a better second half in FY25 while Tech Mahindra sees growth returning from the first quarter onwards.
We believe that this yearwillbebetterthanlast yearWe are now very confident that Q4 marks the low point in our year-to-year growth trajectory, Tech Mahindra Managing Director and Chief Executive Mohit Joshi said during the post-earnings press conference.
However, even as utitlisation rates hovered around the comfortable 85% range in the January-March period, a return to 2019 hiring levels is unlikely in FY25, sectoral expert toldDH. The collective headcount of the top-5 IT services players shrank by 69,167 in FY24.
Simultaneously, all the players in the top-5 pack echoed that the macroeconomic indicators continue to pose uncertainty. I believe FY25 would be another year of consolidation from both demand and supply side, HCL Technologies Managing Director and Chief Executive C Vijayakumar said.
"The recovery of the IT services sector in India is closely tied to the health of the global markets, particularly the US, which represents a significant portion of the revenue for these companies," emphasised Manpreet Singh Ahuja, Chief Digital Officer, PwC India.
"Looking ahead, FY25 is expected to show improved performance compared to FY24. By the end of FY25, one would expect a positive shift in sentiment due to lesser uncertainty, following the conclusion of elections and the Federal Reserve's decisions regarding interest rate cuts," Ahuja added. However, he noted that despite these positive trends, achieving double-digit revenue growth in the current fiscal year remains unlikely.
How did the Big 5 fare in Q4?
TCS surpassed Dalal Street estimates to post a consolidated net profit of Rs 12,434 crore for the fourth quarter, marking a 9% increase from the Rs 11,392 crore recorded a year earlier.
The sectoral bellwether also bagged deals worth $13.2 billion during the quarter to take the companys overall order book to an all-time high of $42.7 billion for the full financial year 2023-24.
Meanwhile Tech Mahindra featured at the bottom of the band with a 40.9% year-on-year decline in its net profit during the fourth quarter at Rs 661 crore.
Much to the disappointment of industry watchers, both Infosys and HCL Tech posted weak FY25 revenue growth guidance for the ongoing fiscal at 1-3% and 3-5%, respectively. Simultaneously Bengaluru-headquartered Wipro forecast a sequential topline growth in the range of -1.5% to +0.5% in constant currency terms.
In terms of fresher hiring, the target for FY25 mirrors that of the last fiscal for both TCS and HCLTechnologies. While the former plans to onboard 40,000 fresh graduates, the latter will be going to campuses to recruit a part of an overall target of 10,000-plus trainees during the full financial year.
Alongside a hybrid work model, contractual hiring will continue to attract a tactical approach i.e. if required, HCLs Chief People Officer Ramachandran Sundararajan said in the post-earnings press conference.
Meanwhile Wipro aims to honour past offer letters before returning to colleges, as Tech Mahindra has set for itself a target of bringing in 6,000 new joinees during the year.
It is possibly going to be a different type of curve than what we have seen in the pastThe job roles in the future are going to be different and the number of people that IT companies and their clients will require for those job roles are going to be lesser, said Shantanu Rooj, founder and chief executive of TeamLease EdTech.
In FY24, barring HCL Technologies, all the companies in the top-5 pack reported a decline in their headcount, both on a sequential, as well as on an annual basis. Their collective workforce shrank by 4.3% in financial year 2023-24 to 15,25,776 as compared to 15,94,943 in FY23.
(Published 29 April 2024, 01:05 IST)
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Big 5 tech giants hopeful in FY25 after mixed Q4 results - Deccan Herald
