TCS and Infosys 2024 Q3 results

Infosys reported its financial results for the third quarter of 2024, revealing various key aspects of its performance:

1. **Earnings Per Share (EPS) and Revenue**: Infosys reported an earnings per share of 18 cents, meeting the analyst estimate. The company’s revenue for the quarter was $4.66 billion, which was slightly above the analyst estimate of $4.63 billion

2. **Net Profit and Revenue Growth**: The company experienced a 7.3% drop in its net consolidated profit compared to the same quarter in the previous year, totaling Rs 6,106 crore. However, Infosys saw a revenue increase of 1.3%.

3. **Operating Margin**: Infosys reported an operating margin of 20.5% for the quarter, a sequential decline from the previous year. The operating margin forecast for the full year was retained at 20%-22%

4. **Full-Year Guidance**: The management revised its revenue growth guidance for fiscal 2024 to the range of 1.5% to 2.0%. This revision reflects the company’s expectations in a challenging environment.

5. **Large Deal Signings**: Infosys recorded large deal signings worth $3.2 billion during the quarter. The CEO, Salil Parekh, mentioned that these deals reflect the strength and relevance of Infosys’ portfolio, including areas such as generative AI, digital, and cloud.

6. **Attrition and Acquisition Plans**: The company improved its attrition rate, bringing it down to 12.9% from 14.6%. Additionally, Infosys announced an agreement to acquire semiconductor design and embedded services provider InSemi, aiming to enhance its Chip-to-Cloud strategy.

7. **Overall Performance**: Despite the challenging environment, Infosys demonstrated strong execution capabilities and operational efficiencies. The company’s cash generation remained robust, with a free cash flow (FCF) to net profit conversion for Q3 at 90.6%.

Tata Consultancy Services (TCS) reported its financial results for the third quarter of the financial year 2024. The key highlights from TCS’s Q3 results are as follows:

1. **Net Profit and Revenue Growth**: TCS achieved a net profit of Rs 11,058 crore in the October-December quarter of the financial year 2024, which is a 2% increase compared to the same quarter in the previous year. The company’s consolidated revenue rose by 4%, reaching Rs 60,583 crore.

2. **EBIT and Net Margin**: The company’s EBIT (Earnings Before Interest and Taxes) margin, also known as the operating margin, increased to 25%, up from 24.3% in the previous quarter. The net margin was reported at 19.4%.

3. **Dividends**: TCS announced a dividend of Rs 27 per share for the financial year 2023-2024, including a special dividend of Rs 18 per share. The record date for the dividend was set for January 19, 2024, and the payment date was scheduled for February 5, 2024.

4. **Attrition Rate**: The company reported a net attrition rate of 13.3%, which is considered within their range of comfort. TCS is committed to hiring from college campuses and growing talent organically.

5. **Investment in Technologies and Global Presence**: TCS has continued its investment in new technologies, particularly in Generative AI, and has a significant global presence with operations and partnerships across various regions.

6. **Order Book and Operational Excellence**: TCS maintained a solid order book, underscoring the sustained demand for its services. The company’s total contract value (TCV) for FY 2022-23 stood at $34.1 billion.

7. **Market Implications and Stock Performance**: The TCS stock and related indices are expected to reflect investor sentiment towards these results. TCS shares closed at Rs 3,736.20 apiece, up 0.61% on the BSE on the day of the announcement.

Here’s a comparison of Infosys and Tata Consultancy Services (TCS) for the third quarter of the financial year 2024