The Indian IT sector demonstrated resilient performance in Q2 FY25 as major players announced their results in mid-October 2024. Despite global economic uncertainties, the sector shows promising signs of recovery. Moreover, companies are expanding their AI capabilities and securing substantial deals.
Infosys
Infosys, India’s second-largest IT services provider, continues to maintain its strong market position behind TCS. Furthermore, the company specialises in consulting, technology outsourcing, and digital transformation services for global clients.
The company revealed its Q2 results on October 17, 2024, showing encouraging growth metrics. Specifically, the revenue increased by 4.25% from ₹39,315 to ₹40,989 crores quarter-over-quarter, while profit grew by 2.22% from 6,374 to ₹6,516. Additionally, the operating income rose by 4.36% QoQ, demonstrating improved operational efficiency. The EPS reached ₹15.84, marking a 4.29% year-over-year increase.
Currently, Infosys maintains a robust market capitalisation of ₹7,77,908 crore. Subsequently, the stock has delivered impressive returns, with a 29.53% surge over six months.
Wipro
Wipro, another major player in the Indian IT landscape, focuses on technology services and digital transformation solutions. Subsequently, the company has strengthened its position through strategic investments in AI capabilities.
The company’s Q2 results, announced on October 17, 2024, showcased significant improvement in profitability. Notably, net profit surged by 6.25% to ₹3,227 crore compared to the previous year. Meanwhile, total bookings reached $3,561 million, with large deal bookings at $1,489 million. The operating margin improved to 16.8%, reflecting a 0.3% QoQ increase.
Looking ahead, Wipro has recommended a 1:1 bonus share issue to shareholders. Furthermore, the company’s strong bookings and margin improvement suggest positive momentum. Meanwhile, the management remains focused on strategic priorities and AI-powered solutions.
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HCL Technologies
HCL Technologies, India’s third-largest IT services company, has established itself as a leader in digital transformation. Additionally, the company has made significant strides in AI implementation through its AI Force platform.
The Q2 FY25 results revealed impressive growth, with revenue reaching ₹28,862 crore. In particular, net profit increased by 10.5% year-on-year to ₹4,235 crore. Moreover, the total contract value reached $2.2 billion, showing strong deal momentum.
As a result of strong performance, HCL Tech raised its FY25 revenue growth guidance to 3.5-5%. Subsequently, the company secured 25 deals involving its AI platform. Meanwhile, the stock has received “buy” ratings from analysts, with Sharekhan expecting industry-leading growth.
Industry Outlook
The IT sector appears to be regaining momentum after facing challenges in previous quarters. Consequently, companies are reporting improved deal pipelines and increasing AI-related opportunities. However, some segments, like BFSI, show mixed performance across companies.
Digital transformation and AI implementation remain key growth drivers for the sector. Therefore, companies investing heavily in these areas are likely to benefit. Furthermore, the strong deal momentum suggests improving client confidence despite global uncertainties.
For investors, the sector presents selective opportunities based on company-specific strengths. Particularly, HCL Technologies and Infosys show strong potential with their robust deal pipelines. Meanwhile, Wipro’s profit growth and bonus issue announcement may attract investor interest.
Written By Fazal Ul Vahab
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