Saturday, August 9, 2014

Comparative Analysis of Top 5 Indian IT firms -- Quarter ending June 30, 2014 (Q1, FY15)

With the Cognizant results released on 7’th August we now have the results of all the Top 5 Indian IT service firms for the quarter ending June  30, 2014  released to the world. Apologies for the delay in sending out this communique as I am travelling outside India on business. For the benefit of those of you who have read my earlier version of the communique that was sent after the 4 firms other than Cognizant released their results, I am marking the changes in YELLOW.

With results of the Top 5 Indian IT firms for the quarter ending June 30, 2014  released to the world, we have adequate data points for a comprehensive comparative analysis and hence again a time for drawing inspiration from the winners and reflecting on the learnings one can pick up from the rest. The idea of this analysis is to present an ‘apples to apples’ comparison view to the readers unlike the view that comes from the media which is some time not an accurate representation of the reality on  the ground as they mix up numbers in INR with that of USD and that of GAAP with IFRS. My analysis is  based on the USD numbers as per IFRS norms based on the balance sheets released by the Top 4 Indian IT firms. Thanks to your constant encouragement, I have been sending out these communiques for over 10 quarters now without skipping even one quarter.

I had written in the communique that I sent last quarter that there seems to be a trend where in the Top IT firms are releasing their results within the first 2 weeks after the quarter ends. This excitement was however short lived as all the firms broke the trend this quarter and took more time to come out with their results. The gap between Infosys releasing its results and the other Top firms releasing its results further increased to an average of 2 weeks. Forbes came out with its list of Top 2000  Global firms a few weeks ago and four of the top 5 Indian IT firms (TCS, Cognizant, Infosys and Wipro) figure in this list. In terms of market capitalization TCS has far out performed the rest of the pack by touching  a value that exceeds the market capitalization of the next 3 firms put together. The market capitalization value of the Top firms is as follows: TCS[84 B USD], Infosys[31 B USD], Cognizant[28 B USD], Wipro[23 B USD] and HCL[18 B USD]. Though these numbers are small compared to IBM at 194 B USD, they do compare well with Accenture at 51 B USD. Now let’s dive deeper into the qualitative and quantitative analysis of the Top 4 IT firms.

Cognizant has had a rather muted growth rate for quarter ending June 30, 2014 with the QoQ growth at 3.9% which is however better than its performance in the last few quarters which had sub 3% QoQ growth rates. The growth rate for FY15 has also been reduced by 2 percentage points compared to its earlier projections of 16% growth in FY15. So it appears the current quarter is an aberration in terms of having ~4% QoQ growth rates and the remaining quarters will follow the 3-3.5% growth rates in line with the trend in the previous quarters which is not very encouraging. However its operating margins as a % of revenues are improving to a 19-20% range in the recent quarters up from the 17-18% levels last year. Also it is the weakest amongst the Indian players in terms of the Geo risk diversification with its exposure to North American market at 77% of its total revenues.  While it is too early to say that it has lost its mojo vis. a vis. the industry leader TCS, one needs to keenly watch this company for the next 4 quarters to get a feeler of its ability to handle the complex delivery related issues arising out steep growth rates which it has been having over the last few years and its ability to streamline the operational agility of the firm and also introduce the right controls and processes needed for a company of its size. However the best thing that happened this quarter is that, it has crossed the 2.5 B USD per quarter revenue run rate which catapults it to the 10 B USD per year company in terms of revenues.

Infosys growth rate might be showing signs of recovery in this quarter and we could perhaps expect a rebound with a new CEO at the helm. The new CEO clearly told the media that his priority was to bring growth back at Infosys by leveraging Innovation and Cutting Edge technologies for adding value to its clients. Infosys grew QoQ for in Q1, FY15 by 2% which is not bad on a standalone basis but does not look very pretty compared to its competition. The operating margins as a percentage of revenues which had hit a rock bottom of 21.8% last year has  rebounded to 25-26% in the last 3 quarters (including the current one) which is a clear sign of success of the firm’s cost optimization strategies. However the YoY growth for Q1, FY15 compared to Q1, FY14 was at 7.1% which means that the firm must accelerate over the next 3 quarters for ending FY15 with a decent growth in line with the 13-15% industry growth rate predicted by NASSCOM. The results for Q1,FY15 are however in line with FY15 growth guidance given by Infosys which is 7-9%. The overall employees today stand at 161,000 and overall utilization has increased to 75% (80% excluding trainees) at the end of Q1, FY15 up from 70% levels last year. Infosys has a client base of 910 active clients today with a net addition of 61 clients in this quarter alone. 

TCS has had a superb quarter which over shadowed all its accomplishments over the last 8 quarters. TCS had  a phenomenal growth of 5.5% QoQ during Q1, FY15 which beat all its growth rates in the last 8 quarters. TCS clocked  a whopping 3.7 B USD in revenues this quarter which clearly places it in a different league compared to the other Indian firms. TCS continues to stick to its core philosophy of ‘high growth with high profitability’ and has taken its profitability to ~30% levels in FY14. However its CEO went on record saying that they will be content with 25-26% operating margins and they want to plough back the rest as investments that fuel future growth and the same philosophy seems to have been already put into action with the current quarter operating margins at 26.3%.  The guidance for FY15 seems very positive and the firm is very confident of outperforming its act in FY14. I will not be surprised if TCS touches 20% revenue growth in FY15 going by its acceleration and its renewed focus on making investments to fuel growth. They seem to be taking a leaf out of Cognizant’s book of high growth fueled by investments and topping it up with the TCS core competency of yielding industry leading operating margins. The overall employee count has crossed the magic number of  300,000  last quarter and its overall utilization was 80% (85% excluding trainees) this quarter.

Wipro is becoming a mystery as there is no specific indicative pattern that one can see over the quarters and its performance is showing fluctuations from time to time. This quarter (Q1, FY15) was a bad one for Wipro with a mere 1.2% QoQ growth with the saving grace being that the YoY growth is 9.6%. While it appeared very good with its Operating margins at 24.5% in the last quarter, it does not look as rosy with a drop In Operating Margins this quarter to 22.8%. Wipro is one company that is making all the right strategic moves and seamlessly translating them to action as well. Keeping this in view the not so rosy performance  and a lack of a clear visibility on whether it is out of the woods or not is indeed a mystery. It has a total of 1022 customers today with a net addition of 31 customers in the current quarter. The year FY15 will be an interesting year for Wipro as it will be a make or break year for this veteran Indian IT firm. Wipro has 148,000 employees on its rolls and its utilization stands at 69%.

HCL  is probably the only company which has become very predictive in terms of its quarterly performance and is indeed a very steady and reliable firm in terms of its growth. It has been showing a steady growth of 3-4% over the last several quarters. HCL has grown by 3.4% QoQ in Q1, FY15 which is in tune with its historical trend. And as I mentioned in one of my earlier communiques this will eventually become the norm for the Indian IT services industry very akin to the much talked about “Hindu rate of growth”. HCL has shown a steep increase in its operating profits as a % of its revenue from ~15% levels 8 quarters ago to ~25% levels today which is a very significant accomplishment. HCL has been growing at a CAGR of 15% over the last 3 years and at the same time its Operating margins are growing at a CAGR of a whopping 40% over the last 3 years.  The firm has 90,000 employees with an utilization of 84%. HCL has crossed 5 B USD in terms of its annual run rate in the year ending March 30, 2014. This will give it further access to the larger deals which in turn will further fuel its growth.

RESULTS FOR QUARTER ENDING JUNE 30, 2014:

The summary of the Q1, FY15 comparative analysis for Infosys, Cognizant TCS, Wipro and HCL is as follows:

1.       TCS leads in terms of QoQ Revenue growth at 5.5% with Cognizant following at 3.9%, HCL at 3.4%, Infosys at 2% and Wipro trailing at 1.2%
2.       TCS  leads in YoY Revenue growth at  16.7% with Cognizant following at 16.5%, HCL at 14.6%, Wipro at 9.6% and  Infosys trailing at 7.1%
3.       CTS leads in terms of QoQ Operating Profits growth at 6.1%, with HCL at 1.7%,  Infosys at 0.4%, TCS at -4.8% and Wipro trailing at -5.9%
4.       HCL leads in terms of YoY Operating Profits growth at 33.2% with Wipro  following at 24.9%, Cognizant at 14.3%,  Infosys at 14.5% and TCS trailing at 13.6%
5.       TCS leads in terms of Operating Profits as a % of revenues at 26.3% with Infosys following at 25.1%, HCL at 24.2%, Wipro at 22.8% and Cognizant trailing at 19.4%
6.       Cognizant leads in terms of SG&A expenses as a % of revenues at 19.2% with TCS following at 18.3%, Infosys at 11.9% and HCL trailing at 11.8%

Following is a chart showing the comparative analysis of these top firms on various financial parameters:

Q1, FY14
Parameter
Infosys
TCS
Wipro
HCL
CTS
Q1 Revenues(M USD)
2133
3694
1740.2
1406.9
2517.1
QoQ Growth
2.0%
5.5%
1.2%
3.4%
3.9%
YoY Growth
7.1%
16.7%
9.6%
14.6%
16.5%
Q1 Operating Profits(M USD)
536
972
397
340.7
487.9
QoQ Growth
0.4%
-4.8%
-5.9%
1.7%
6.1%
YoY Growth
14.5%
13.6%
24.9%
33.2%
14.3%
As % of Revenues
25.1%
26.3%
22.8%
24.2%
19.4%
Q1 Net Profits(M USD)
482
845
NA
305.4
371.91
QoQ Growth
-1.0%
-1.9%
NA
15.7%
6.6%
YoY Growth
15.3%
20.5%
NA
44.3%
23.8%
As % of Revenues
22.6%
22.9%
NA
21.7%
14.8%
Q1 SG&A Expenses
253
677
NA
166
482.9
As % of Revenues
11.9%
18.3%
NA
11.8%
19.2%
*Wipro does not give P&L for Global IT services separately. There is a single P&L for Wipro Limited

Please do feel free to send in your feedback and I will really appreciate comments and suggestions…


Note: The views expressed in the article above are purely the personal views of the author and have nothing to do with the firm he works for


Friday, August 1, 2014

Comparative Analysis of TCS, Infosys, Wipro and HCL -- For the Quarter ending June 30, 2014 (Q1, FY15)

With results of the top 4 of the Top 5 Indian IT firms for the quarter ending June 30, 2014  released to the world, we have adequate data points for a comprehensive comparative analysis and hence again a time for drawing inspiration from the winners and reflecting on the learnings one can pick up from the rest. The idea of this analysis is to present an ‘apples to apples’ comparison view to the readers unlike the view that comes from the media which is some time not an accurate representation of the reality on  the ground as they mix up numbers in INR with that of USD and that of GAAP with IFRS. My analysis is  based on the USD numbers as per IFRS norms based on the balance sheets released by the Top 4 Indian IT firms. Thanks to your constant encouragement, I have been sending out these communiques for over 10 quarters now without skipping even one quarter.

I had written in the communique that I sent last quarter that there seems to be a trend where in the Top IT firms are releasing their results within the first 2 weeks after the quarter ends. This excitement was however short lived as all the firms broke the trend this quarter and took more time to come out with their results. The gap between Infosys releasing its results and the other Top firms releasing its results further increased to an average of 2 weeks. Forbes came out with its list of Top 2000 Global firms a few weeks ago and four of the top 5 Indian IT firms (TCS, Cognizant, Infosys and Wipro) figure in this list. In terms of market capitalization TCS has far out performed the rest of the pack by touching  a value that exceeds the market capitalization of the next 3 firms put together. The market capitalization value of the Top firms is as follows: TCS[84 B USD], Infosys[31 B USD], Wipro[23 B USD] and HCL[18 B USD]. Though these numbers are small compared to IBM at 194 B USD, they do compare well with Accenture at 51 B USD. Now let’s dive deeper into the qualitative and quantitative analysis of the Top 4 IT firms.

Infosys growth rate might be showing signs of recovery in this quarter and we could perhaps expect a rebound with a new CEO at the helm. The new CEO clearly told the media that his priority was to bring growth back at Infosys by leveraging Innovation and Cutting Edge technologies for adding value to its clients. Infosys grew QoQ for in Q1, FY15 by 2% which is not bad on a standalone basis but does not look very pretty compared to its competition. The operating margins as a percentage of revenues which had hit a rock bottom of 21.8% last year has  rebounded to 25-26% in the last 3 quarters (including the current one) which is a clear sign of success of the firm’s cost optimization strategies. However the YoY growth for Q1, FY15 compared to Q1, FY14 was at 7.1% which means that the firm must accelerate over the next 3 quarters for ending FY15 with a decent growth in line with the 13-15% industry growth rate predicted by NASSCOM. The results for Q1,FY15 are however in line with FY15 growth guidance given by Infosys which is 7-9%. The overall employees today stand at 161,000 and overall utilization has increased to 75% (80% excluding trainees) at the end of Q1, FY15 up from 70% levels last year. Infosys has a client base of 910 active clients today with a net addition of 61 clients in this quarter alone. 

TCS has had a superb quarter which over shadowed all its accomplishments over the last 8 quarters. TCS had  a phenomenal growth of 5.5% QoQ during Q1, FY15 which beat all its growth rates in the last 8 quarters. TCS clocked  a whopping 3.7 B USD in revenues this quarter which clearly places it in a different league compared to the other Indian firms. TCS continues to stick to its core philosophy of ‘high growth with high profitability’ and has taken its profitability to ~30% levels in FY14. However its CEO went on record saying that they will be content with 25-26% operating margins and they want to plough back the rest as investments that fuel future growth and the same philosophy seems to have been already put into action with the current quarter operating margins at 26.3%.  The guidance for FY15 seems very positive and the firm is very confident of outperforming its act in FY14. I will not be surprised if TCS touches 20% revenue growth in FY15 going by its acceleration and its renewed focus on making investments to fuel growth. They seem to be taking a leaf out of Cognizant’s book of high growth fueled by investments and topping it up with the TCS core competency of yielding industry leading operating margins. The overall employee count has crossed the magic number of  300,000  last quarter and its overall utilization was 80% (85% excluding trainees) this quarter.

Wipro is becoming a mystery as there is no specific indicative pattern that one can see over the quarters and its performance is showing fluctuations from time to time. This quarter (Q1, FY15) was a bad one for Wipro with a mere 1.2% QoQ growth with the saving grace being that the YoY growth is 9.6%. While it appeared very good with its Operating margins at 24.5% in the last quarter, it does not look as rosy with a drop In Operating Margins this quarter to 22.8%. Wipro is one company that is making all the right strategic moves and seamlessly translating them to action as well. Keeping this in view the not so rosy performance  and a lack of a clear visibility on whether it is out of the woods or not is indeed a mystery. It has a total of 1022 customers today with a net addition of 31 customers in the current quarter. The year FY15 will be an interesting year for Wipro as it will be a make or break year for this veteran Indian IT firm. Wipro has 148,000 employees on its rolls and its utilization stands at 69%.

HCL  is probably the only company which has become very predictive in terms of its quarterly performance and is indeed a very steady and reliable firm in terms of its growth. It has been showing a steady growth of 3-4% over the last several quarters. HCL has grown by 3.4% QoQ in Q1, FY15 which is in tune with its historical trend. And as I mentioned in one of my earlier communiques this will eventually become the norm for the Indian IT services industry very akin to the much talked about “Hindu rate of growth”. HCL has shown a steep increase in its operating profits as a % of its revenue from ~15% levels 8 quarters ago to ~25% levels today which is a very significant accomplishment. HCL has been growing at a CAGR of 15% over the last 3 years and at the same time its Operating margins are growing at a CAGR of a whopping 40% over the last 3 years.  The firm has 90,000 employees with an utilization of 84%. HCL has crossed 5 B USD in terms of its annual run rate in the year ending March 30, 2014. This will give it further access to the larger deals which in turn will further fuel its growth.



RESULTS FOR QUARTER ENDING JUNE 30, 2014:

The summary of the Q1, FY15 comparative analysis for Infosys, TCS, Wipro and HCL is as follows:

1.       TCS leads in terms of QoQ Revenue growth at 5.5% with HCL following at 3.4%, Infosys at 2% and Wipro trailing at 1.2%
2.       TCS  leads in YoY Revenue growth at  16.7% with HCL following at 14.6%, Wipro at 9.6% and  Infosys trailing at 7.1%
3.       HCL leads in terms of QoQ Operating Profits growth at 1.7% with  Infosys following at 0.4%, TCS at -4.8% and Wipro trailing at -5.9%
4.       HCL leads in terms of YoY Operating Profits growth at 33.2% with Wipro  following at 24.9%, Infosys at 14.5% and TCS trailing at 13.6%
5.       TCS leads in terms of Operating Profits as a % of revenues at 26.3% with Infosys following at 25.1%, HCL at 24.2% and Wipro trailing at 22.8%
6.       TCS leads in terms of SG&A expenses as a % of revenues at 18.3% with Infosys at 11.9% and HCL at 11.8%


Following is a chart showing the comparative analysis of these top firms on various financial parameters:

Q1, FY14
Parameter
Infosys
TCS
Wipro
HCL
Q1 Revenues(M USD)
2133
3694
1740.2
1406.9
QoQ Growth
2.0%
5.5%
1.2%
3.4%
YoY Growth
7.1%
16.7%
9.6%
14.6%
Q1 Operating Profits(M USD)
536
972
397
340.7
QoQ Growth
0.4%
-4.8%
-5.9%
1.7%
YoY Growth
14.5%
13.6%
24.9%
33.2%
As % of Revenues
25.1%
26.3%
22.8%
24.2%
Q1 Net Profits(M USD)
482
845
NA
305.4
QoQ Growth
-1.0%
-1.9%
NA
15.7%
YoY Growth
15.3%
20.5%
NA
44.3%
As % of Revenues
22.6%
22.9%
NA
21.7%
Q1 SG&A Expenses
253
677
NA
166
As % of Revenues
11.9%
18.3%
NA
11.8%
*Wipro does not give P&L for Global IT services separately. There is a single P&L for Wipro Limited

I will be back with more updates once Cognizant comes out with its quarterly results on August 6, 2014. Please do feel free to post in your feedback on my views…



Note: The views expressed in the article above are purely the personal views of the author and have nothing to do with the firm he works for


Thursday, May 8, 2014

Comparative Analysis of Top 5 Indian IT firms -- Year and Quarter ending updates for March 31, 2014

With the Cognizant results released yesterday we now have the results of all the Top 5 Indian IT service firms for the year and quarter ending March  31, 2014  released to the world and thus have adequate data points for a complete look at the comparative performance of these firms. For the benefit of those of you who have read my earlier version of the communique that was sent after the 4 firms other than Cognizant released their results, I am marking the changes in YELLOW.

Like always this is an apple to apple comparison of the Top 5 companies based in IFRS accounting standards and also considering the time period from April 1, 2013 to March 31, 2014. This is important as different firms have different financial years and this is the only way we can standardize the comparison for the last 12 months.

One interesting trend is that unlike the previous quarters where the gap between Infosys announcing the results and the remaining companies following suit took a few days to a week or even more, this time all the Top 4 companies announced their results within a 48 hour period. Looks like corporate governance and financial adeptness is again back in vogue as the latest fad. Cognizant announced its results on pretty much on the same day as they did last year.

Before we delve into the detailed analysis of the comparative performance of these top firms, let’s have a quick look at the 3 key trends that I am seeing in the demeanor of these Top 5 firms.

Firstly ‘the move towards greater profits’ is a clear and certain change that is happening uniformly across all the 4 firms. Gone are the days when only Infosys and TCS would be hovering around 25-29% and the rest would move around 15-20% operating profits levels. If you look at the Q4, FY14 results we see 3 out of the 4 top firms with Operating profits as a % of revenues at around 25% and with TCS clearly leading at 30%. Cognizant seems to be the only outlier to this trend with Operating profits at 19%. Secondly all the Top 5 firms now are in the ‘5 B USD plus club’ with HCL being the latest entrant this year and TCS is the lone player in the ‘10 B USD plus club’ and well on its way to join the ‘15 B USD plus club’ in FY15. Cognizant will be joining the ‘10 B USD plus club’ in FY15. Lastly the ‘share of North American market’ as an overall % of revenues has been reducing across all the firms and the share of Emerging markets and Europe has been increasing.

Cognizant growth rate seemed to have slowed down from its hey days during the last year where it touched 7% QoQ levels to a more somber 2.8% levels for the quarter ending March 31, 2014. Cognizant grew YoY in FY14 compared to FY13 by a whopping rate of 21% and has outsmarted its nearest competitor TCS by nearly 4 percentage points. The operating margins as a % of revenues are decent at around 19% in the recent quarters and have remained stable at around 18-19% in the last 8 quarters. The growth guidance for the next year is 16.5% and it appears as if TCS will accelerate further in FY15 exceeding the growth rates of Cognizant.  When the slowing growth rate and lower margins are looked in tandem it does not appear as if the “ploughing back the profits into Sales related investments” strategy of Cognizant is yielding the same results as in the last few years. Keeping this in view TCS looks much more healthier at 29% operating margins and their CEO says that they want to maintain Operating profits at 26-28% and plough the remaining into platforms and solutions as investments for future. On a comparative basis the gaps on all parameters between TCS and its competition will further widen next year.

Infosys growth rate was showing signs of recovery in the past 6 quarters and signs of rebound were visible. It has now again somewhat taken a beating and the firm finished Q4, FY14 with a QoQ drop of -0.4% in revenues. However the yearly growth trend looks healthy with a 11.5% growth YoY and this shows an upward trend and nearly doubled from 5.8% levels an year ago. The operating margins as a percentage of revenues which had hit a rock bottom of 21.8% three quarters back has  rebounded to 25-26% in the last 2 quarters which is a clear sign of success of the firm’s cost optimization strategies. The overall employee count is 160,000 and overall utilization was increased to 74.4% at the end of Q4, FY14 up from 70% levels 4 quarters back. Infosys has a client base of 898 active clients today with a net addition of 92 clients in FY14.  The firm has given a rather muted guidance of 7-9% growth for FY15 but the analysts expect that it will outdo its FY14 performance in FY15.

TCS has had yet another phenomenal year and closed the financial year FY14 with a  revenues of a whopping 13.4 B USD which is more than double of what the firm did in FY10. It is a text book example of ‘high growth with high profitability’ characteristic and has further upped its ante by taking its profitability to ~30% levels in this financial year. While the QoQ revenue increase in Q4, FY14 was disappointing at 1.9% it is over shadowed by rather sober 17% YoY growth levels in FY14 vis a vis FY13. The overall employee count has crossed the magic number of  300,000  this quarter and its overall utilization was 78% this quarter. The guidance for FY15 seems very positive and the firm is very confident of outperforming its act in FY14. So we could expect 18-20% revenue growth for TCS in FY15.

Wipro has done quite well this quarter with a QoQ growth of 2.5% and when this is seen in the wake of its consistent 2.5-3% growth in the last 4 quarters, points to the fact that it has come out of the woods. What is even more interesting is that it has managed to improve its Operating margins by a tune of 4 percentage points in the last 4 quarters and ended Q4, FY14 at 24.5%. It has managed to shrink its revenues from the North American market to sub 50% levels in FY14 thus reducing its geo based market risks. It has a total of 986 customers today with a net addition of only 8 customers in FY14. The year FY15 will be an interesting year for Wipro as it will be an year when it will possibly bounce back to double digit growth after a hiatus of 3 years.

HCL  is the only company that has been showing a steady growth of 3-4% over the last several quarters. And as I mentioned in one of my earlier communiques this will eventually become the norm for the Indian IT services industry very akin to the much talked about “Hindu rate of growth”. HCL has shown a CAGR of 14% over the last 3 years on the revenue front and is accelerating with all cylinders firing on the profitability front with a CAGR of a whopping 40% over the last 3 years. HCL has shown a steep increase in its operating profits as a % of its revenue from ~15% levels 8 quarters ago to ~25% levels today which is a very significant accomplishment. This silent achievement speaks volumes about the companies strategies in three areas : viz. cost optimization in terms of eliminating wastes, improvement in employee productivity and non-linear revenues especially in the Infrastructure space.


A.      RESULTS FOR FINANCIAL YEAR ENDING MARCH 31, 2014:

The summary of the FY14 comparative analysis for Infosys, TCS, Cognizant, Wipro and HCL is as follows:

1.       Cognizant  leads in YoY Revenue growth at 20.8% with TCS following at 16.2%, HCL at 14.1%, Infosys at 11.5% and Wipro trailing at 6.4%
2.       HCL leads in terms of YoY Operating Profits growth at 38.1% with Cognizant following at 25.7%, TCS  at 25%,  Wipro at 16.2% and Infosys trailing at 3.7%
3.       TCS leads in terms of Operating Profits as a % of revenues at 29.1% with Infosys following at 24%, HCL at 23.3%,  Wipro at 22.6%  and Cognizant trailing at 19.2%
4.       Cognizant leads in terms of SG&A expenses as a % of revenues at 18.7% with TCS following at 18.3%, HCL at 18.5% and Infosys trailing at 11.9%

Following is a chart showing the comparative analysis of these top firms on various financial parameters:

FY14
Parameter
Infosys
TCS
Wipro
HCL
CTS
FY14 Revenues(M USD)
8249
13442
6617
5180
9244
YoY Growth
11.5%
16.2%
6.4%
14.1%
20.8%
FY14 Operating Profits(M USD)
1979
3906
1496
1207
1772
YoY Growth
3.7%
25.0%
16.2%
38.1%
25.7%
As % of Revenues
24.0%
29.1%
22.6%
23.3%
19.2%
FY14 Net Profits(M USD)
1751
3139
NA
943
1293
YoY Growth
1.5%
22.9%
NA
39.9%
18.4%
As % of Revenues
21.2%
23.4%
NA
18.2%
14.0%
FY14 SG&A Expenses
978
2457
NA
650
1727
As % of Revenues
11.9%
18.3%
NA
12.5%
18.7%
*Wipro does not give P&L for Global IT services separately. There is a single P&L for Wipro Limited

B.      RESULTS FOR QUARTER ENDING MARCH 31, 2014:

The summary of the Q4, FY14 comparative analysis for Infosys, TCS, Cognizant, Wipro and HCL is as follows:

1.       HCL leads in terms of QoQ Revenue growth at 3.0% with Cognizant following at 2.8%, Wipro at 2.5%, TCS at 1.9% and Infosys trailing at -0.4%
2.       Cognizant  leads in YoY Revenue growth at  19.9% with TCS following at 18.8%, HCL at 14.3%, Wipro at 8.5% and  Infosys trailing at 7.9%
3.       Wipro leads in terms of QoQ Operating Profits growth at 9.2% with  HCL following at 6.9%, Cognizant at 2.7%, Infosys at 1.5% and TCS trailing at -0.2%
4.       HCL leads in terms of YoY Operating Profits growth at 44.3% with Wipro  following at 31.6%, TCS at 27%, Cognizant at 25.7% and Infosys trailing at 16.8%
5.       TCS leads in terms of Operating Profits as a % of revenues at 29.1% with Infosys following at 25.5%, HCL  at 24.6%,Wipro at 24.5% and Cognizant trailing at 19%
6.       Cognizant leads in terms of SG&A expenses as a % of revenues at 20% with TCS following at 18.1%, HCL at 12.2% and Infosys at 11.5%

Following is a chart showing the comparative analysis of these top firms on various financial parameters:

Q4, FY14
Parameter
Infosys
TCS
Wipro
HCL
CTS
Q4 Revenues(M USD)
2092
3503
1720.2
1361
2422.34
QoQ Growth
-0.4%
1.9%
2.5%
3.0%
2.8%
YoY Growth
7.9%
18.8%
8.5%
14.3%
19.9%
Q4 Operating Profits(M USD)
534
1021
421
335
460.04
QoQ Growth
1.5%
-0.2%
9.2%
6.9%
2.7%
YoY Growth
16.8%
27.0%
31.6%
44.3%
25.7%
As % of Revenues
25.5%
29.1%
24.5%
24.6%
19.0%
Q4 Net Profits(M USD)
487
861
NA
264
348.9
QoQ Growth
5.2%
0.3%
NA
9.3%
7.6%
YoY Growth
9.7%
32.1%
NA
39.8%
22.8%
As % of Revenues
23.3%
24.6%
NA
19.4%
14.4%
Q4 SG&A Expenses
240
635
NA
166
485.4
As % of Revenues
11.5%
18.1%
NA
12.2%
20.0%
*Wipro does not give P&L for Global IT services separately. There is a single P&L for Wipro Limited


Please do feel free to post in your feedback on my views…


Note: The views expressed in the article above are purely the personal views of the author and have nothing to do with the firm he works for