Quarterly Report of India’s IT Companies 2023, Q4

Calendar Year Q4 2023 is Indian Financial Year Q3 2023-24

Introduction

Annual

In this Insight, ARC Advisory Group includes the most recent quarterly results for major Indian IT suppliers that publicly report their results.

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.

Companies have substantially increased the hiring of fresh graduates to expand the talent pool of skilled employees, which should hopefully address the shortage of skilled workers and reduce the cost of delivery.

Q4

Financial results during calendar period from October 1 to December 31.

India’s information technology (IT) services industry witnessed a muted revenue growth due to the seasonality of fewer working days and higher furloughs.

Four leading Indian IT services companies that have announced third quarter earnings indicate that the demand environment continues to be challenging amid some cautious optimism for the future. The IT services sector delivered a soft and muted growth compared to last year.

IT Services companies reported muted performance during the quarter with average revenue growth QoQ, in an otherwise seasonally strong quarter.

Overview

Suppliers Analyzed in Report

Executive Summary

Q4

We expect the companies that we covered to report steady sequential revenue growth on good demand, healthy deal wins, and active mergers and acquisition activities.

Several IT companies reported delay in closing the deals during Q3, its primarily due to the higher-than-expected number of furloughs. This shows that the Indian IT firms' Q3 revenue remained muted.

The focus and future attention of IT firms is on new demand emerging from technologies like generative AI, machine learning and cloud computing.

Muted and weakend results from the IT sector are likely to have a limited impact on the market as the underperformance is already factored in.

The IT services sector reported a muted number and subdued profit amid weak demand growth compared to the last year.  Indian IT & Services industry recorded combined quarterly revenue of $23.1 billion and recorded 5 percent year-over-year (YoY) growth as compared to last year.

The third-quarter earnings of the top four Indian IT companies indicate that the demand environment continues to be challenging amid some cautious optimism for the future.

Despite industry challenges, there is optimism in the sector which helps to accelerate the resumption of delayed projects.

The focus of IT companies is on new demand emerging from technologies like generative AI, machine learning and cloud computing, as well as new deal wins by the Indian IT companies during 2023.

Cyient

Current Financial Year Quarterly Analysis

Q4 YoY

Cyient (Estd: 1991, NSE: CYIENT) partners with over 300 customers, including 40 percent of the top 100 global innovators, to deliver intelligent engineering and technology solutions for creating a digital, autonomous, and sustainable future. As a company, Cyient is committed to designing a culturally inclusive, socially responsible, and environmentally sustainable Tomorrow Together with its stakeholders. Overall, this quarter forms a very good foundation for the company to build for the future quarters harnessing the momentum generated through focus on growth and efficiency. Cyient collaborated with SkyDrive Inc. a Japanese company. The collaboration will enable SkyDrive to cater to the global UAM market, including India. Urban Air Mobility (UAM) offers seamless, secure, and rapid transportation, helping to mitigate current and future challenges faced in urban areas. 

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