TCS edges past Infy in slow Dec quarter

Both firms may see slowest full-year growth in current fiscal year

- Shouvik Das Jas Bardia

Tata Consultancy Services (TCS) Ltd grew faster than its closest rival Infosys Ltd in the December quarter and beat profit estimates, even as both IT industry heavyweights remain at risk of clocking some of their weakest growth numbers in 2023-24.

At least a third of TCS's incremental growth in the third quarter was driven by the large contract it secured from state-owned telecom firm Bharat Sanchar Nigam Ltd (BSNL). Excluding that, its performance was only a tad better than that of Infosys, which posted a third straight quarter of muted performance with both revenue and profit falling short of Street expectations.

Also, TCS, the country's largest technology services company, and Infosys, saw their combined workforce decline sequentially by 11,781 in the December quarter. The two companies together accounted for about a fifth of the IT industry's $245 billion revenue in 2022-23.

On Thursday, TCS reported revenue of $7.28 billion for the third quarter, representing a 1% sequential increase and a 2.9% increase from the same period a year earlier. It added $206 million in incremental revenue, of which $84 million came from its India business, a bulk of it from the BSNL contract.

Net profit improved 2.7% sequentially from the September quarter, and by 7% from a year earlier, to $1.41 billion.