Comparative Analysis of Top Indian IT firms

Now that Cognizant has come out with its results today for quarter ending March, 2012; we have the results of all the leading Indian IT services firms for this quarter and this lends an easy comparison on the financial parameters. I have looked at the financial statements of these companies for this quarter as well as for the last 12 months so as to get an ‘apples to apples’ comparison (Some of these firms do not have their financial year ending on 31’st March and hence getting the data for FY12 was not so straightforward). Please find below the salient data points based on my analysis of the financial statements:

A.      Quarterly Performance ( Q4, FY12 / JFM Quarter, 2012)

1. CTS leads in terms of QoQ Revenue growth at 2.9%, with TCS and HCL following at 2.4% and Infosys trailing at -1.9%

2. CTS leads in YoY Revenue growth at 24.8% with TCS following at 18% and Infosys trailing at 10.5%

3. CTS  leads in terms of QoQ Operating Profits growth at 2.9% with Wipro following at 1.5% and Infosys trailing at -5.7%

4. HCL leads in terms of YoY Operating Profits growth at 25.2% with CTS following at 19.6%, TCS at 15.3% and Infosys trailing at 13.8%

5. Infosys leads in terms of Operating Profits as a % of revenues at 29.8% with TCS closely following at 27.7% and CTS and HCL trailing at 18.5% and 15.7% respectively

Parameter	Infosys	TCS	HCL	CTS	Wipro
Q4 Revenues(M USD)	1771	2648	1047	1711	1535.6
QoQ Growth	-1.9%	2.4%	2.4%	2.9%	2.0%
YoY Growth	10.5%	18.0%	14.6%	24.8%	9.7%
Q4 Operating Profits(M USD)	528	733	164	317	318
QoQ Growth	-5.7%	-3.0%	1.2%	2.9%	1.5%
YoY Growth	13.8%	15.3%	25.2%	19.6%	2.7%
As % of Revenues	29.8%	27.7%	15.7%	18.5%	20.7%
Q4 Net Profits(M USD)	463	585	121	243	NA
QoQ Growth	1.1%	3.0%	8.0%	1.3%	NA
YoY Growth	15.2%	10.6%	17.5%	16.8%	NA
As % of Revenues	26.1%	22.1%	11.6%	14.2%	NA

B.      FY12 / Last 12 months ending 31’st March Annual Performance

1. Infosys has shown a YoY growth of 15.8% in revenues and 13.2% in Operating Profits. Its Operating Profit as a % of revenue is 28.8%

2. CTS has shown a YoY growth of 29.1% in revenues and 26% in Operating Profits. Its Operating Profit as a % of revenue is 18.4%

3. TCS has shown a YoY growth of 24.2% in revenues and 22.1% in Operating Profits. Its Operating Profit as a % of revenue is 27.6%

4. HCL has shown a YoY growth of 21.5% in revenues and 33.8% in Operating Profits. Its Operating Profit as a % of revenue is 15.3%

5. Wipro has shown a YoY growth of 13.4% in revenues and 3.9% in Operating Profits. Its Operating Profit as a % of revenue is 20.8%

Parameter	Infosys	TCS	HCL	CTS	Wipro
FY12 Revenues(M USD)	6994	10170	4035	6461	5921
YoY Growth	15.8%	24.2%	21.5%	29.1%	13.4%
FY12 Operating Profits(M USD)	2013	2805	618	1188	1232
YoY Growth	13.2%	22.1%	33.8%	26%	3.9%
As % of Revenues	28.8%	27.6%	15.3%	18.4%	20.8%
FY12 Net Profits(M USD)	1716	2236	454	918	NA
YoY Growth	14.5%	15.3%	34.3%	16.2%	NA
As % of Revenues	24.5%	22.0%	11.3%	14.2%	NA

Do let me know your comments and I will be back with further analysis on the non-financial parameters soon…

Comparative Analysis of Quarterly Results for Infosys, TCS and HCL

I did a comparative analysis of the balance sheets of the 3 leading IT companies that have declared the results till date (Infosys, TCS and HCL) and here are the key observations:

1.       Infosys leads in terms of QoQ Revenue growth at 3.5% with TCS trailing at 2.4% and HCL at 2%

2.       Infosys is lagging in YoY Revenue growth at 13.9% with TCS leading at 20.6% and HCL at 18.3%

3.       Infosys also leads in terms of QoQ Operating Profits growth at 14.3% with TCS trailing at 10.5% and HCL at 13.3%

4.       HCL leads in terms of YoY Operating Profits growth at 42.1% with TCS trailing at 24.8% and Infosys at 16.9%

5.       Infosys leads in terms of Operating Profits as a % of revenues at 31% with TCS trailing at 29.2% and HCL at 15.9%

6.       The SG&A expenses as a % of revenues are at 12% for Infosys with TCS leading the pack at 18% and HCL at 14.5%

The complete table showing the numbers is below for your reference:

Parameter	Infosys	TCS	HCL
Q3 Revenues(M USD)	1806	2586	1022
QoQ Growth	3.4%	2.4%	2.0%
YoY Growth	13.9%	20.6%	18.3%
Q3 Operating Profits(M USD)	560	756	162
QoQ Growth	14.3%	10.5%	13.3%
YoY Growth	16.9%	24.8%	42.1%
As % of Revenues	31.0%	29.2%	15.9%
Q3 Net Profits(M USD)	458	568	112
QoQ Growth	11.4%	7.6%	4.7%
YoY Growth	15.4%	9.2%	25.8%
As % of Revenues	25.4%	22.0%	11.0%
SG&A Expenses	216	460	148
As % of Revenues	12.0%	17.8%	14.5%

Please send in your comments and I will be back with more observations once CTS and Wipro also announce their results.

Deepak Pelluru's Forbes.com Articles

My “trilogy” encompassing articles on Innovation, Leadership and Globalization has been published on Forbes.com CEO Network. It will really encourage me if you take a moment to check out these blogs and possibly leave a comment or two on the Forbes web site. The links are as follows:

1.       Leadership: Why every manager should think and act like a CEO?

http://www.forbes.com/sites/infosys/2011/12/16/business-leadership-bte/

2.       Innovation: A new avatar of innovation for emerging economies!

http://www.forbes.com/sites/infosys/2011/12/14/innovation-for-emerging-economies/

3.       Globalization: The future of globalization…

http://www.forbes.com/sites/infosys/2011/12/13/emerging-economies-bte/

Thanks a lot for your support!