In the week that went by, TCS, Infosys, HCL Technologies, Wipro and HDFC Bank were the first to release their quarterly results. Analysts and investors will closely track this earnings season as India Inc delivered a dismal bottom-line performance in the September quarter amid shrinking margins. Data shows that the combined net profit of 2725 listed companies across sectors declined 6.3% y-o-y in Q2FY23, which was the first contraction after eight quarters of growth. Combined net sales of all companies rose 26% y-o-y in Q2FY23.
However, analysts expect the performance of the corporate sector to have improved in Q3 as prices of raw materials eased due to falling commodity costs.
The big four IT companies have posted decent earnings & shown remarkable resilience. It was primarily because of new noteworthy deal wins & ramp-up of deals won in the previous quarter. Before jumping on to company results, let’s have a look at some of the critical developments in the IT sector:
Now that we have understood the overview of what has happened to date at the broader industry level cumulatively, it is essential to look at the hits & misses from these companies individually.
Key Highlights:
Management Commentary:
Key Highlights:
Management Commentary:
Key Highlights:
Management Commentary:
Key Highlights:
Management Commentary:
Investors should not consider every correction an opportunity and instead adopt a staggered investment approach to build a position in these stocks. The IT spending in Europe and North America has continued in Q3 and is expected to be strong in Q4FY23. Even though tech spending may slow down for a few quarters & the budgets may get scaled down due to supply-side pressures, the long-term trend is intact.
Source: BSE and NSE
Source: BSE
?OMCs share price gains as during the week as compensation demand was supported by Union Minister Hardeep Singh Puri. OMCs are has kept prices of petrol and diesel despite crude oil prices surging globally in 2022. This has led companies to report losses in Q2FY23. OMCs are now expecting Rs.50,000 crore for the losses incurred in 2022.
?Delhivery share price declined as the company saw a huge block deal where in around 2.84 mn shared changed hands. New age tech companies have been under the radar since their IPO lock in period is finished and key investors are exiting at lofty valuations. Nykaa and Paytm also witnessed block deals during the week.
?TCS, Infosys, Wipro and HCL Tech reported their earnings in the week. A broader earnings trend indicate that IT companies margins have improved in Q3FY23 compared to last quarter and they have also witnessed improvement in attrition numbers which indicates improving supply side concerns.
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