TCS vs Infosys: 5 most important comparisons you should know

Two Indian leading IT companies Infosys and TCS, announced their Q3 FY24 financial results today post market hours. Both companies reported muted revenue growth for the quarter, indicating that clients continue to spend cautiously on technology. Let's analyse and compare the Q3 numbers of these two IT giants.

: Infosys reported a 1.3% YoY improvement in its consolidated revenue, reaching 38,821 crore in Q3 FY24. On a sequential basis, revenue was down by 0.4%. The revenue in constant currency (CC) terms also declined by 1% YoY. On the other hand, TCS reported consolidated revenue of 60,583 crore for the quarter ending in December, marking 4% YoY growth.

Sequentially, TCS saw a 1.5% increase in revenue. In constant currency terms (CC), the revenue grew by 1.7% YoY. : Both companies posted a muted performance in their key revenue segments. Infosys saw a 0.72% QoQ increase but a 4% YoY dip in revenue from the financial services segment, reaching 10,783 crore in Q3.

This segment contributed to 30% of Infosys' overall revenue during the quarter. TCS reported a revenue of 22,667 crore from the Banking, Financial Services, and Insurance segment, reflecting a marginal QoQ drop of 0.75% but a YoY increase of 2.35%. This segment contributed to 37% of TCS's total revenue in Q3.

: TCS posted a 2.48% QoQ drop in its consolidated net profit at 11,097 crore in Q3 FY23. In the preceding quarter (Q2 FY24), it reported a net profit of 11,380 crore. : Comparing the year on year (YoY) performance, there was a 2% improvement in net profit. In the same quarter a year ago, the company recorded a net profit of 10,883 crore.

During the quarter, the company's net profit was affected by a one time charge of 958 crore, allocated towards the settlement of a legal claim, according to the company's earnings filing. Infosys posted a consolidated net profit of 6,106 crore, down over 7% from 6,586 crore in the year ago period.

On a sequential basis as well, the company's profit fell 1.7% from 6,212 crore in the September 2023 quarter. : Infosys reported a TCV of $3.2 billion, which is lower than last quarter’s record of $7.7 billion. In parallel, TCS reported a TCV of $8.1 billion, marking a decline from the $11.2 billion reported in the preceding quarter.

Notably, its TCV falls below the quarterly guidance range of $9–10 billion. : : In Q3, both companies experienced a decline in their headcounts. TCS witnessed a net decrease of 5,680 employees in Q3, bringing its workforce to 603,305 as of December 31st. Similarly, Infosys reported a reduction of 6,101 employees for the quarter ending in December, resulting in a workforce of 322,663 at the close of the third quarter.

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