India’s IT Industry Sees Marginal Growth in Q3 FY20-21

Overview

India’s information technology (IT) services industry saw marginal growth in the third quarter.  In this report, we analyze the revenues of India’s IT services sector for the third quarter of financial year 2020-21 and compare these with the same period the previous year.

This report discusses the financial results of the top 17 India-based IT companies listed on the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), or both.  We believe this Insight provides a representative sample of India’s IT market.  The suppliers included in this report recorded combined quarterly revenue of $16.3 billion, representing 2.6 percent year-over-year growth.  Seven out of the 16 companies reported year-over-year decrease in software or product revenues, while the rest showed growth in Q3.  The rupee depreciated by 2.6 percent during the quarter compared with the same period last year.

Supplier Revenues

This ARC Advisory Group report discusses the most recent quarterly revenue results of the major publicly traded IT services companies based in India.  We translated financials reported in Indian rupees to US dollars using an average exchange rate for the given reporting period.  Owing to this translation, some companies may show negative growth.  The suppliers’ reporting period for this analysis is the quarter ending in December unless stated otherwise.  We have considered the consolidated revenues for all vendors, including subsidiaries’ revenues, except for Wipro, for which we only considered IT products and services.

3i Infotech reported total revenue of $37.3 million for the quarter ending December 31, 2020.  This represents a decline in growth of 7.3 percent compared with the same period prior year.  Ninety-five percent of 3i Infotech’s revenues came from “IT Solutions” (software products & services, software development, consulting, and IT infrastructure services) and the rest from “Transaction Services” (IT-enabled services). 

Cyient reported revenue of $141.4 million for the quarter ending December 31, 2020.  The revenues were decreased by 8.9 percent year over year.  Geographically, revenues from the Americas contributed 49.1 percent, EMEA 25.3 percent, while APAC and other contributors were 25.6 percent. 32.6 percent from aerospace & defense; 11.5 percent from transportation; 11.9 percent from industrial, energy & natural resources.  From the business unit perspective - 4.3 percent from semiconductor; 7.1 percent from medical & healthcare; 8.4 percent from Portfolio; and 24.1 percent from communications in this quarter.  Total employee strength was 12,187 at the end of this quarter.  Cyient has added 13 new customers in this quarter.

HCL Technologies achieved total revenue of $2.6 billion for the second quarter, representing a 2.9 percent year-over-year growth rate. Industry application services contributed 14.1 percent, IT and business services contributed 70.4 percent, engineering and R&D services 15.5 percent in this quarter.  Geographically, 62.5 percent of revenues came from the Americas, 29.5 percent from Europe, and 8 percent from the ROW.  Vertically, manufacturing contributed 18.1 percent to the growth of HCL, and financial services 21.4 percent.  Life sciences & healthcare contributed 13.6 percent, retail & CPG 10.5 percent, public services contributed 10.4 percent, and telecommunications 8.3 percent.  The total employee count in HCL was 159,682 in this quarter. 

Hexaware Technologies report not published.

Infosys reported $3.5 million revenues for the quarter ended December 31, 2020.  This represents 8.4 percent growth over the same period the prior year.  Vertically, 33.1 percent of revenues came from insurance banking and financial services; 9.3 percent from manufacturing and 8.2 percent from hi-tech; 14.7 percent from retail and 7.1 percent from life sciences; and 12.5 percent from energy, utilities, and 12.4 percent from communication and services, and 2.7 percent from others.  Geographically, 61.6 percent of revenues came from North America, 24 percent from Europe, 2.6 percent from India, and 11.8 percent from ROW.  Infosys and its subsidiaries added 139 customers during the period.  Infosys and its subsidiaries had a total headcount of 249,312 employees at the end of this quarter.

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Keywords: IT (Information Technology), IT Services, Quarterly Supplier Revenues, Software Development, Business Process Outsourcing (BPO), ARC Advisory Group.