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Infosys and Wipro delivered better than expected sequential growth in dollar denominated revenue for the September quarter. The difference in their performance was on the front of profitability and the total contract value of new deals. While Infosys disappointed on these parameters, Wipro surpassed analysts’ estimates on profits, profitability and also reported a revival in new deals. In that sense, Wipro’s performance was well rounded.Now that the country’s top four IT exporters have delivered their respective second quarter numbers, a common thread that binds them together is the upward trend in the top line. Each of the four companies reported a sequential growth in reported dollar denominated revenue for the September quarter after a gap of six quarters. The last time it had happened in the December 2022 quarter. The uptick indicates a gradual pick up in the project ramp ups after a slower pace of execution in prior few quarters. While the IT companies were booking new orders, the delay in ramp ups was affecting their top line growth in the previous quarters.114331177 The improving trend is also captured in the year-on-year movement of the trailing 12-month (TTM) revenue. The incremental TTM revenue for TCS, Infosys and HCLTech started inching up in the September quarter. After peaking in the March 2022 quarter, it gradually declined in subsequent quarters up until the September 2024 quarter. In addition, while Wipro continued to report a drop in the TTM incremental revenue even in the latest reported quarter, the extent of the fall reduced to $518.8 million from $550 million in the previous quarter.Another trend is the sequential rise in the employee attrition rate. Each of the four companies reported a 10-40 basis points sequential increase in attrition rates. While it is too early to predict whether it would continue in subsequent quarters, it may indicate a gradual momentum in hiring activities after a lull for the past few quarters. In addition, TCS and Infosys reported sequential net employee addition in the September quarter.Barring Infosys, other companies showed a sequential uptick in new deal wins. Wipro staged a remarkable recovery – Its TCV for new deals increased to $3,561 million from $3,284 million in the prior quarter while large deals TCV jumped to $1,489 million from $1,154 million.For Infosys, after a strong order flow of above $ 4 billion in the previous two quarters, the TCV for large deals was at $ 2.4 billion. Nevertheless, the company has increased the FY25 constant currency revenue guidance to 3.75-4.5% growth from earlier 3-4% growth reflecting a positive top line momentum. While these top IT exporters have started showing improved rate of project execution, their management commentaries continued to exude cautious optimism. Clients continue to focus on improving cost efficiency, which may weigh on their decision making when they plan annual IT budgets in a couple of months. Given these factors, IT stocks are expected to show a range bound movement in the near term.

American Depository Receipts (ADRs) of Infosys and Wipro fell by over 4% on Thursday to hit the day's low of $22.02 and $6.11, respectively, following their Q2FY25 earnings.ADRs are a form of equity shares created to simplify foreign investing for American investors. India's second-largest software exporter Infosys on Thursday reported a 5% growth in its consolidated net profit, reaching Rs 6,506 crore in the second quarter, compared to Rs 6,212 crore a year ago. The company revised its FY25 revenue guidance to 3.75%–4.5%. The upward revision of revenue guidance for the fiscal comes on the back of a ramp-up of mega deals. Earlier, the company had given revenue growth guidance of 3-4% for FY25. Revenue from operations in the second quarter increased 5% year-on-year (YoY) to Rs 40,986 crore.Revenue for the quarter grew 3.3% YoY in constant currency terms and 3.1% QoQ. Operating margins, meanwhile, saw a marginal decline of 0.1% YoY and were flat QoQ.Operating margins for the quarter were supported by continued benefits from value-based pricing and utilisation, despite higher employee payouts.Meanwhile, IT major Wipro reported a 21% jump in net profit to Rs 3,209 crore for the quarter ended September 2024 versus Rs 2,646 crore logged in the year-ago period. The figure was higher than ET Now poll estimates of Rs 3,050 crore.Revenue from operations in the reported quarter stood at Rs 22,302 crore, marginally lower than Rs 22,516 crore posted in the corresponding quarter of the previous financial year.Gross revenue was at Rs 22,300 crore ($2,662.6 million), an increase of 1.5% QoQ and a decrease of 1% YoY. IT services segment revenue was at $2,660.1 million, an increase of 1.3% QoQ and a decrease of 2% YoY. Non-GAAP2 constant currency IT services segment revenue increased 0.6% QoQ and decreased 2.3% YoY.“We expect revenue from our IT Services business segment to be in the range of $2,607 million to $2,660 million,” Wipro said in a company statement, spelling out the outlook for the quarter ending December 31, 2024. This translates into sequential guidance of (-) 2.0% to 0.0% in constant currency.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times