about 1 year ago
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The Q1FY21 earnings of the top three frontline companies is out. And the market has shown amply that it’s a thumbs up – the worst was expected and compared to that, all three have done relatively well.

TCS showed a bump, albeit almost a flat rise in its consolidated revenue but the fall in its net profit was much sharper than the two.

In terms of operating margins, though TCS has a higher margin, it is Infosys which has shown a sequential growth – up from 20.5% to 22.7%.

What has really worked in favour of Infosys is that the management seems to have gained its lost confidence – it’s the only frontline company to stick out is neck and give a guidance – that’s a huge positive.

What the results have also shown us is that all three companies are garnering more work, while retaining most of their old clients. There has been no major attrition or reduction in any of the large contracts – all three have in fact gained new contracts.

The Covid pandemic has its challenges but these Indian IT companies might actually see an opportunity bloom as digitisation gains centerstage; with 40% of the revenues of all three coming from digitization, they are poised to do well.

In terms of stock price, Wipro has not grown as much as the other two while Infosys has run much ahead.  So, should you buy now? The stock prices have soared in this current rally and it would be best to stay put and buy once this frenzy ends. You can even book profit in these stocks now and re-enter again when price comes down.

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