Building front-end and stitching it with back-end is a task that IT firms are learning the hard way, finds Raghu Krishnan.
Equity indices overcame a wobbly start to clock gains for the third session on the trot on Tuesday, propped up by banking, metal and energy stocks amid a mixed trend in global markets. A recovery in the rupee also bolstered sentiment, traders said. The 30-share BSE Sensex advanced 246.47 points or 0.45 per cent to settle at 54,767.62 after starting the trade on a weak note. In a volatile session, the benchmark hit a high of 54,817.52 and a low of 54,232.82 during the day.
Which entrepreneur would willingly part with her or his hard-earned money for grasping, self-serving politicians? asks Debashis Basu.
From the Sensex pack, NTPC, Tata Motors, Titan, Larsen & Toubro, Reliance Industries, IndusInd Bank, Infosys, HDFC Bank and Power Grid were among the major gainers. Wipro and Tech Mahindra were the laggards.
The board expansion comes against the backdrop of an ongoing tussle between the founders and the management over contentious issues such as CEO salary hike, severance package to former employees and corporate governance standards.
Strong macroeconomic headwinds causing turbulence in the $245-billion Indian IT industry are yet to calm down. Top Indian IT services companies are likely to post a decline or just marginal growth in sequential revenue in Q1FY24 because of a soft discretionary spending environment. Though the first quarter is seasonally strong for IT firms, "June 2023 will be an exception", according to analysts at Kotak Institutional Equities.
According to analysts, IT firms like Infosys, TCS and HCL Technologies are likely to benefit the most on account of larger US exposures and dollar billing.
Morgan Stanley's Asia and Global Emerging Markets Strategy Report downgraded software firms on valuation and earnings concerns.
Equity indices chalked up losses for the second straight session on Monday, in tandem with a bearish trend overseas as ratcheting up of hostilities in Ukraine and prospects of further rate hikes by the US Fed soured global risk sentiment. The rupee slipping to another all-time low against the US dollar amid foreign fund outflows added to the gloom, traders said. After tumbling over 800 points in intra-day trade, the 30-share BSE Sensex clawed back some lost ground to end 200.18 points or 0.34 per cent lower at 57,991.11.
There are no major announcements in the Union Budget 2014-15.
JP Morgan has downgraded the Indian information technology sector to 'underweight' as it believes the heydays of the sector are over. Rising margin headwinds in the near-term and the revenue headwinds in the medium-term from a potential macro slowdown, Ankur Rudra and Bhavik Mehta of JP Morgan said in the report, will mean that the sector's earnings upgrade cycle is behind. "We see peak revenue growth behind us and earnings before interest and taxes (EBIT) margins trending down from inflation, mean revision.
At a time when the market is betting on a 'higher for longer' global interest rate view, Accenture's (ACN) weak revenue forecast is a negative read-through for the Indian IT firms, according to analysts. The Dublin-based company sees its revenue growth at 2-5 per cent in constant currency (cc) for the financial year 2024 (FY24), below the pre-Covid levels of 5-8 per cent for FY17-20. The weak projection, thus, signals that slower demand is likely to persist this year, and any recovery is unlikely in the near-to-medium term, experts note.
5,565 contracts, valued at $201 billion are up for rebids across geographies and verticals by 2018.
By 2026, around 25 per cent of the global population may spend at least an hour a day on Metaverse. This will open the doors for many businesses, the NFTs market will spread, and Web 3.0 will attract more investment.
AI, cloud computing, data analytics are a few areas companies are looking for proficiency in
TCS is setting up a large BPO operation in Varanasi next year, some staff could be absorbed there
According to Nasscom, engineering services exports had grown at 13 per cent in 2017 compared to six per cent rise in IT services exports and eight per cent in business process management (BPM). It had also recorded the highest growth in the last three years, reports Debasis Mohapatra.
Fourth quarter earnings of blue-chips such as Infosys, TCS, Wipro, RIL and inflation data for March will dictate the trend on the bourses in a holiday-shortened week ahead, experts said.
Ajit Mishra, vice president, research, Religare Broking, answers your queries.
The strategy of returning cash to shareholders through stock purchases could hinder their digital expansion plans
Faced with a spate of senior-level exits, Infosys co-founder N R Narayana Murthy has written to employees to reassure them that the "leadership changes" will be in the "best interest" of the company.
Delays in promised service delivery were earlier settled between client and service provider. More organisations now opt for a legal settlement to save cost and protect investor sentiment, say analysts.
The catchwords today are digital, analytics, robotics.
The early bird results for the January-March quarter of 2022-23 (Q4FY23) show a pick-up in earnings growth, despite a slowdown in revenue growth, thanks to a decline in input costs and lower provisioning for bad loans by banks. The combined net profit of 66 companies that have, so far, declared their quarterly results was up 15.2 per cent year-on-year (YoY) in Q4FY23, an improvement from 4.3 per cent YoY growth in Q3. Net sales growth of these companies, however, slowed down to 11.5 per cent YoY in January-March 2023, the slowest rate in eight quarters.
Infosys chief Vishal Sikka took home an annual salary package of $7.45 million (about Rs 48.73 crore) for the 2015-16 financial year.
Most large companies have curbed their hiring plans in 2018-19 because they continue to invest in digital technologies.
Though a weak dollar will lend some support to revenues and margins in FY21, the demand environment will outweigh any gain.
Tepid growth in verticals like banking and finance, healthcare, retail and automotive will drag overall IT spends in the current year, reports Debasis Mohapatra.
At times of slow growth, India has seen number of graduates doubling since 2008 to almost 25 million in 2016
Employee costs for Indian IT services players have touched an all-time high as salaries soar in their effort to retain talent. Engineer salaries are going through the roof. According to a news report, Infosys, which reported a 27.7 per cent attrition rate for the fourth quarter of FY22, plans to have an average salary hike of 12-13 per cent. High potential employees will get increases of 22-23 per cent.
Appreciating rupee against the dollar and fresh buying by domestic institutional investors added to the momentum
In dollar terms, its m-cap rose to $76 billion
After last year's lull, number of offers jump by 15%.
Investors seem to be shying away from stocks of companies in the 'digital' space with most counters that comprise the Nifty India Digital index giving negative returns over the past year. The index tracks the performance of a portfolio of stocks that broadly represent the 'digital theme' within basic industries, such as software, e-commerce, IT-enabled services, industrial electronics, and telecom services. The fall in some of these stocks over the past year has been steep; the sharpest decline of around 60 per cent was seen in shares of PB Fintech (parent company of Policybazaar).
According to reports, Vodafone NZ had offered all its employees, other than call centre and retail staffers, voluntary severance package
In dollar terms, TCS' market valuation rose to $84 billion.
A slowdown in hiring by India's top IT companies has resulted in a sharp increase in the industry's profit per employee in Q3FY23. The top four IT companies earned a net profit of 1.7 lakh per employee during October-December 2022, up 8.6 per cent from Rs 1.57 lakh in Q2FY23 and 16.3 per cent from a record low of Rs 1.47 lakh in Q1FY23. Earnings per employee in the third quarter were, however, still down 0.9 per cent on a year-on-year (YoY) basis.
The rally in mid- and small-cap stocks has spilled over into the IT sector as well. Second and third-tier IT stocks, which historically traded at a discount to the big five IT companies, are now trading at nearly 25 per cent premium to their large-cap peers. The smaller IT companies have a price-to-earnings (P/E) multiple of nearly 38 times against the big five's current P/E multiple of around 31x.
Nasscom and the Chinese government have given the task of creating a matchmaking platform to Zeta-V, set up in June 2017 in Shanghai by Sujit Chatterjee, former CEO of TCS China, and Rangarajan Vellamore, former CEO of Infosys China.
Amid Trump's expected action against employment visas, India's bellwether IT firms reveal they have been preparing for this eventuality for years.
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