The pecking order among the top four IT players is on expected lines going by the June quarter numbers reported by these companies.

HCL Technologies delivered growth in key financials, which was higher than what Infosys and Wipro managed, but lower than what TCS delivered. Though HCL’s financials were marginally off market consensus, they were nonetheless reasonably healthy.

The company managed healthy client additions, its key verticals expanded and its infrastructure services offering once again achieved strong traction.

During the quarter, HCL’s revenues grew by 3.4 per cent sequentially in dollar terms. TCS achieved a spectacular 5.5 per cent, while Infosys and Wipro managed a slower 1.2-2 per cent.

Broad-based growth

For HCL, most of its verticals grew, with financial services and telecom leading the charge growing at a pace of 9-10 per cent. For TCS, too, growth was broad-based across most segments except BFSI, while for Wipro, telecom, manufacturing and healthcare delivered well.

Again, HCL’s key infrastructure services offering grew at an impressive 3.8 per cent sequentially.

Wipro’s relatively low-margin infrastructure services and BPO offerings led the growth for it during the quarter.

But as with Infosys, Wipro and TCS, discretionary spends were not that forthcoming from clients in the high-margin offerings. HCL managed one customer addition in the $50-million category and as many as 13 clients in the $10-30 million bucket, placing it well ahead of Infosys’ and Wipro’s strike rate.

Of course, the leader of the pack TCS added five in the $50-million bucket.

Clearly, TCS has been managing to get a higher market share when compared to its peers.

North America led the growth for both TCS and Infosys, though the former managed to derive significant traction in Europe as well.

In the case of HCL, significant traction was from Europe while revenue growth from the America’s geography was not very pronounced. But for Wipro, both these geographies barely grew sequentially.

HCL’s utilisation level, at 84.5 per cent, is matched only by TCS, with the others still way behind.

TCS, HCL lead

The June quarter results reiterate the order of preference for the markets among the top-tier IT companies, with TCS and HCL looking well set to exceed the estimated industry growth rate of 13-14 for FY15.

In fact, going by what Infosys and Wipro have managed thus far, TCS and HCL may deliver 1.5-2 times higher revenue growth.

It may be challenging for Infosys and more so for Wipro to bridge the valuation gap with TCS and HCL.

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