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India's IT bellwethers - TCS, Infosys and Wipro - have wrapped up their Q4 FY25 earnings season. And one thing's clear: the golden years of double-digit growth are behind them, at least for now.
Why? Client spending has turned cautious, particularly in North America and BFSI - two core pillars for Indian IT. Margins are being squeezed. Attrition is no longer a big problem, but growth sure is.
So, what do these numbers mean for long-term investors? Is it time to exit or stay invested?
TCS: Don't panic, but don't expect too much
- Revenue: Rs 64,479 crore (up 5.3 per cent YoY)
- Net profit: Rs 12,434 crore (down 1.7 per cent YoY)
- Final dividend: Rs 28/share
TCS remains the steadiest of the lot. It's not firing on all cylinders, but it's not in panic mode either. Margins held up decently at 24.6 per cent, and it hit the $30 billion revenue mark for the full year - a first for any Indian IT company.
But what's missing is a clear growth trigger. North America and BFSI - which together account for more than 50 per cent of revenue - are still under stress. New deal wins are stable but not explosive. For now, TCS feels more like a high-quality compounder at a low gear.
Infosys: A major letdown
- Revenue: Rs 40,925 crore (up 7.9 per cent YoY)
- Net profit: Rs 7,033 crore (down 12 per cent YoY)
- FY26 revenue guidance: 0-3 per cent growth
Infosys' results were the most disappointing of the three. Its margins slipped to 20.1 per cent - a significant fall - and the company guided for just 0-3 per cent growth in FY26. That's a major reset from the 4-7 per cent outlook it gave just months ago.
The stock took a beating after the results, and rightly so. This isn't the Infosys of the pandemic years, riding digital transformation tailwinds. This is an Infosys trying to recalibrate expectations.
Wipro: Good but not good enough
- Revenue: Rs 22,504 crore (up 1.3 per cent YoY)
- Net profit: Rs 3,570 crore (up 26 per cent YoY)
- Q1FY26 guidance: Revenue could fall 1.5-3.5 per cent QoQ
Wipro surprised with a 26 per cent jump in profit, mostly thanks to cost controls and better operational discipline. However, it reported a single-digit revenue growth in Q4FY25, and guidance suggests a revenue dip in Q1.
While the market cheered its results, the larger narrative remains unchanged: Wipro still lacks a growth engine. It's no longer bleeding, but it isn't exactly gaining ground either.
Final take
India's largest IT players are no longer fast-moving growth stories - they're mature, margin-sensitive businesses with limited pricing power. While the big client deals continue to happen, the pace is slower and with much tighter conditions.
The next year may not be any easier for these companies, either. All in all, investing in these IT behemoths is no longer about capturing growth but about backing resilience.
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Disclaimer: This is not a stock recommendation. Do your due diligence before investing. This article was composed with the assistance of artificial intelligence. While we've taught our digital scribe to behave, we still recommend a pinch of healthy scepticism alongside your reading. Enjoy-and proceed with a knowing smile!
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