Q4 earnings: TCS, Infosys, Wipro brace for muted show amid weak global macros, tight spends

The Indian IT sector is gearing up for the fourth quarter (Q4) earnings season, with three major IT companies - Tata Consultancy Services (TCS), Infosys, and Wipro - set to announce their financial results between April 15 and 19, 2023. These announcements mark the beginning of the earnings season for the Indian IT industry.

Tata Consultancy Services (TCS), India's largest IT services company, is scheduled to announce its Q4 earnings on April 15, 2023. In the previous quarter, TCS reported a revenue growth of 7.5% year-on-year (YoY) to INR 103,355 crore ($13.3 billion). The company's net profit grew by 5.3% YoY to INR 27,937 crore ($3.6 billion). However, the company's revenue growth was lower than the market expectations due to unfavorable currency movements and higher tax rates.

Infosys, the second-largest IT services company in India, is expected to announce its Q4 earnings on April 18, 2023. In the previous quarter, Infosys reported a revenue growth of 12.3% YoY to INR 37,565 crore ($4.9 billion). The company's net profit grew by 20.7% YoY to INR 9,363 crore ($1.2 billion). Infosys' strong performance was driven by its digital business, which grew by 25% YoY in the previous quarter.

Wipro, the third-largest IT services company in India, is scheduled to announce its Q4 earnings on April 19, 2023. In the previous quarter, Wipro reported a revenue growth of 5.5% YoY to INR 23,350 crore ($3 billion). The company's net profit grew by 2.3% YoY to INR 3,536 crore ($465 million). However, the company's revenue growth was lower than the market expectations due to unfavorable currency movements and lower deal wins in the quarter.

The Indian IT sector is bracing for a muted earnings season due to weak global macroeconomic conditions and tight client spending. The ongoing geopolitical tensions, inflationary pressures, and uncertainty around the economic recovery from the COVID-19 pandemic are expected to impact the revenue growth of these companies. Additionally, the US dollar's strength against the Indian rupee is expected to negatively impact the revenue growth of these companies due to their significant revenue exposure to the US market.

Despite these challenges, the Indian IT sector is expected to continue its growth trajectory due to its strong fundamentals, large deal pipeline, and focus on digital transformation initiatives. The sector is also expected to benefit from the ongoing shift towards cloud computing, automation, and artificial intelligence (AI) technologies.

In conclusion, the Q4 earnings season for the Indian IT sector is expected to be challenging due to weak global macroeconomic conditions and tight client spending. However, the sector is expected to continue its growth trajectory due to its strong fundamentals and focus on digital transformation initiatives. The announcements from TCS, Infosys, and Wipro will provide insights into the financial performance of these companies and the overall health of the Indian IT sector.