Infosys grows faster than Wipro in July-September quarter

Infosys announced its July-September quarter results for fiscal 2024-25 on Thursday, reporting a rise of 4.7 percent in net profit at ₹6,506 crore, compared to ₹6,212 crore in the corresponding period last year.

Infosys grew faster than Wipro in July-September due to higher business from clients in Europe, signalling higher growth for the coming quarters.

Infosys's revenue from operations in the second quarter of the current fiscal rose 5.1 percent to ₹40,958 crore, compared to ₹38,994 crore in the year-ago period.

Strong showing  

“We had strong growth of 3.1 percent quarter-on-quarter in constant current in Q2. The growth was broad-based, with good momentum in financial services. This stems from our strength in industry expertise, market-leading capabilities in cloud with Cobalt, and generative AI with Topaz, resulting in growing client preference to partner with us”, said Salil Parekh, CEO and managing director of Infosys.

A visibly happy Salil Parekh attributed the company’s performance to a strong showing by clients in the banking and financial services sector during the company’s post-earnings press briefing on Thursday.

“There are specific factors for the growth... it’s really more focussed on the traction we saw on financial services, and then (in) each of the others we have seen quarter-on-quarter growth, except for retail,” said Mr Parekh.

Infosys raised its guidance to 3.75-4.5% in constant currency terms for the 12 months through March 2025—its seventh growth guidance revision in eight quarters. The management had outlined a 3-4% growth in constant currency terms after the April-June quarter.

At Wipro, some disappointment

As at Infosys, much of Wipro’s business was pushed by clients in Europe, who contributed 63%, or $17 million, of the company’s sequential incremental revenue of $27 million.

Srinivas Pallia, who took over as Wipro’s chief executive officer just a little over six months ago, attributed the company’s growth to green shoots from clients operating in the banking and financial services sector.

“From our vantage point, discretionary spending has remained constant since the previous quarter—nothing much has changed. But for us, we’re seeing momentum across industries in the Americas. This gives us signs of a good pipeline,” Pallia said during the company’s post-earnings briefing on Thursday.

While Wipro’s report card might have shown more sunlight than cloud, at least one analyst was not very optimistic about the company’s performance.

“Wipro continues to be a laggard in comparison with its other large-cap peers. It has failed to capitalise on its strength sectors such as oil and gas, and manufacturing,” said Omkar Tanksale of  Axis Securities.

Wipro has outlined a revenue contraction of 2% to nil growth for the December quarter. But there was another bright spot in Wipro’s report card: its operating margin expanded 30 basis points sequentially to 16.7%—again, its best margin performance since September 2021.

For Infosys, operating margins remained unchanged at 21.1%.

(By arrangement with livemint.com)