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Table 1: Q3 FY25 results analysis of TCS, Infosys, HCL, and Wipro
(Source: Value Research Online)
The IT behemoths, TCS, Infosys, HCL, and Wipro, have reported their Q3 FY25 results. The analysis below provides insights into their performance, key highlights, and valuation multiples.
TCS:
- Revenue growth: 12.3% YoY, in line with expectations
- Net profit growth: 13.3% YoY, driven by cost savings
- Operating margin expansion: 100 bps, significantly outperforming the industry
- Valuation: 24.4x CY26E EV/EBITDA, slightly lower than peers
Infosys:
- Revenue growth: 12.4% YoY, above estimates
- Net profit growth: 14.6% YoY, driven by operating leverage
- Operating margin expansion: 140 bps, outperforming peers
- Valuation: 23.6x CY26E EV/EBITDA, at a premium to peers
HCL:
- Revenue growth: 11.5% YoY, in line with expectations
- Net profit growth: 16.1% YoY, driven by expense control
- Operating margin expansion: 120 bps, narrow expansion
- Valuation: 22.1x CY26E EV/EBITDA, undervalued compared to peers
Wipro:
- Revenue growth: 10.4% YoY, slightly below estimates
- Net profit growth: 14.3% YoY, driven by operating leverage
- Operating margin expansion: 80 bps, below peers
- Valuation: 21.4x CY26E EV/EBITDA, at a discount to peers
Key takeaways:
- The IT giants delivered strong revenue and profit growth, driven by operating leverage and cost savings.
- TCS and Infosys outperformed their peers in terms of operating margin expansion, while HCL and Wipro lagged behind.
- The valuations of these companies have converged, with no clear leader or laggard.
- Investors can consider TCS, Infosys, and HCL for their long-term portfolios, while Wipro’s valuation may not be as attractive.
In conclusion, the Q3 FY25 results of the IT heavyweights highlight their ability to navigate the challenging macro environment and maintain strong profitability. While there are no clear winners or losers, investors can consider TCS, Infosys, and HCL for their long-term portfolios, considering their valuation and performance.