IT majors see rise in net profit on back of deal wins

Bengaluru: IT giants Infosys, Wipro and LTIMindtree reported higher net profit year-on-year (YoY) for the July-September quarter (Q2FY25) on Thursday.

While momentum in the financial services segment contributed to growth for Infosys, it was led by sequential growth across verticals and geographies for LTIMindtree. Wipro attributed the rise in profits to strong executions and large deal bookings.

Bengaluru-based Infosys raised its full year revenue growth guidance for the second time this fiscal - to 3.75 per cent-4.5 per cent from 3 per cent-4 per cent.

Wipro, on the other hand, expects revenue to decline by upto 2 per cent sequentially or stay unchanged in the ongoing October-December quarter, due to "seasonal furloughs and fewer working days", as per Chief Executive Officer Srini Pallia.

Infosys reported a yearly uptick of 5 per cent in its revenue at Rs 40,986 crore, while its profit after tax (PAT) increased 4.7 per cent to Rs 6,506 crore. Additionally, the company reported a flat operating margin at 12.1 per cent while maintaining its guidance of 20 per cent-22 per cent for FY25. 

The IT giant's headcount increased for the first time in seven quarters, as it added about 2,500 employees on a net basis on a quarterly basis. Commenting on the delayed onboarding which made news recently, Chief Executive Salil Parekh said that a phased manner of hiring was underway.

Its total contract value of large deal wins stood at $2.4 billion, and the company announced an interim dividend of Rs 21 per share for Q2. 

“Infosys has been winning new, large and long term deals and has continued to present itself as a strong partner that is able to deliver a wide range of digital products and services that solve client problems,” said Ishan Anand, Principal Analyst, Gartner.  

Its peer Wipro posted a 21.2 per cent year-on-year rise in its consolidated net profit at Rs 3,208.8 crore for Q2. Gross revenue stood at Rs 22,300 crore, down 1 per cent year-on-year, while IT services operating margin for the quarter stood at 16.8 per cent, up 0.7 per cent. 

The technology services provider also announced a 1:1 bonus issue of shares. Shareholders will receive one free share for every one share held as of the record date. 

Wipro reported a net decline of 502 employees for Q2, taking its total employee count to 233,889.

Commenting on the onboarding of freshers, Wipro Chief Human Resources Officer Saurabh Govil said, "By the end of the current quarter, we will make sure there is no backlog of any of the offers made. It will all be taken care of”. 

“The outlook stays positive with Wipro’s overall product capabilities, and comprehensive service and support offerings,” said Gartner’s Anand. 

LTIMindtree posted a consolidated net profit of Rs 1,251 crore, up 7.7 per cent year-on-year. It posted consolidated revenue from operations at Rs 9,432.9 crore for the quarter, annually up around 6 per cent from Rs 8,905.4 crore. It added 2,504 employees in Q2, taking its total workforce to 84,438. It also announced an interim dividend of Rs 20 per share.