Q4 results: TCS reports profit, but what of Infosys and Wipro?

Infosys and Wipro will announce their Q4 results this week.

Indian IT firms are all getting ready to reveal their Q4 results and things are looking a little brighter after the biggest tech firm in India, the Tata Consultancy Services (TCS) reported a profit that actually beat street estimates last week. The good news there was that both artificial intelligence and cloud computing helped provide a great booster. Now the focus has shifted to Infosys and Wipro.

TCS has revealed its Q4 result and beaten analysts expectations. Now, all eyes are on Infosys and Wipro. (REUTERS)

The outlook is already brighter in the wake of TCS numbers, but what exactly should investors focus on? Will there be a rebound in client spending? Will earnings actually get a booster shot?

Most eyes will be rivetted on Infosys and Wipro revenue forecasts and commentary related to client spending. This is especially so as TCS said that 2025 fiscal will be better than the 2024 fiscal based on deal wins trends.

Infosys Q4 announcement on Thursday: Highlights to look out for

As far as Infosys Q4 revenue is concerned, the country’s No. 2 IT services company, “probably grew modestly”, Bloomberg reports.

There may be some relief coming from cost cuts even as discretionary projects from clients get delayed, according to Nomura’s Abhishek Bhandari and Krish Beriwal.

Bloomberg says, “The annual revenue at Infosys likely grew at the slowest pace since the 2018 fiscal year, consensus shows. Fourth-quarter profit probably edged higher, with salary hikes denting margins.”

Notably, Infosys gets almost a third of revenue from financial services and insurance companies, but these are also some of the badly hit segments for client spending.

Wipro Q4 announcement Friday: Highlights to look out for

“Wipro will probably see profit shrink for a second straight year,” Bloomberg reported. For Wipro, there is another factor at work that is adding uncertainty. Its Chief Executive Officer Thierry Delaporte has resigned at a critical juncture. Now, with new CEO Srinivas Pallia coming in, investors would be looking forward to hear what he has to say about client spending trends.

Pallia was earlier the CEO of a part of the Americas business and some analysts say that appointing an insider to the post meant Wipro’s execution issues may persist. However, others said his three decades at the firm will come in handy.