TCS, Infosys, and Wipro Q3 Results Today: Know Projections Ahead Of Crucial Earnings

Higher cost of hiring, surging salaries, and lower working-days may have a bearing on margins but falling rupee compared to the dollar may help

New Delhi: Three IT services majors — Infosys, TCS, and Wipro — are among the first set of large-cap companies to announce December earnings on Wednesday. The third quarter is typically seen as the lull period for the IT services sector as a result of furloughs in its majority markets, including the US and Europe.

The operating margin of India Inc is likely to witness a drop in the December quarter with a 100-120 bps year-on-year (YoY) decline, as 27/40 sectors are set to see crimped margins despite higher revenue, according to the Crisil report quoted in a PTI report.

However, Indian IT sector is expected to post strong growth despite cost pressure. Higher cost of hiring, surging salaries, and lower working days may have a bearing on margins but falling rupee compared to the dollar may help.

Surging commodity prices and price hikes may help companies report a healthy 16-17 per cent revenue growth to Rs 9.1 lakh crore during the quarter ending December, the Crisil report said on Tuesday.

Here Are Projections For December Results

Wipro:  Wipro is expected to report rupee revenue growth in the range of Rs 20,300 crore to Rs 20,368 crore, according to a report in the Business Standard. The IT firm’s EBIT margin may be impacted as a result of salary hikes and may witness a dip around 400 basis points YoY.

The company is expected to post nearly flat YoY profit growth, but revenue growth is projected 28-29 per cent for the quarter, according to the Economic Times report. With changes in the leadership and a number of measures being implemented at operational and organisational level, the market will closely watch on its impact.

Infosys: For the projected quarter, the company managed to conclude a number of big deals, including contracts from Posten Norge —the Norwegian postal service, Proximus, Orion, and Tennis Australia. Going by the analysts at YES Securities, Infosys is expected to upgrade its current guidance of 16.5-17.5 per cent constant currency (CC) growth for FY22 to 17-18 per cent in CC terms, according to the report in Economic Times. In the last quarter as well, the IT firm reported a 20 per cent revenue growth beating Street expectation.

The company may witness about 20 per cent YoY growth in revenue and a low-double-digit rise in net profits for the third quarter, according to analyst projection in the Economic Times report.

TCS:  Tata Consultancy Services is also expected to report revenue growth of 13-14 per cent and a profit expansion of 14-17 per cent compared to last year on the back of strong deal wins during the December quarter, according to the Economic Times report. The company clinched deals from new and existing clients across Jaguar Land Rover, SBI, Cainz, Celcom, Juniper, Swiss Re, and Plaza Premium Group among others. The board may consider a proposal for buyback of shares on Wednesday besides posting its December results.