Topline growth at IT’s fab four slows, but headcount, revenue traction bode well

The growth in the aggregate dollar denominated revenue for the country’s top four software exporters slowed down to a four-quarter low of 7.6 per cent yearon-year during the September 2018 quarter. The sample includes Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies ranked in the descending order of FY18 revenue. TCS grews its revenue at the fastest rate of 10 per cent among the sample companies and continued to grow in double digits for the third consecutive quarter. While TCS and Infosys have improved the year-onyear rate of revenue growth over the past few quarters, Wipro and HCL Tech have reported deceleration.

On the trailing 12-month (TTM) basis, too, TCS and Infosys reported improved growth rate in the revenue. For TCS, TTM revenue growth increased to 10.2 per cent in the September 2018 quarter from 6.3 per cent in the corresponding quarter of the previous year. HCL Tech, on the other hand reported a fall in growth rate to 10.9 per cent from 12.3 per cent by similar comparison. An encouraging factor is the strong employee addition during the second quarter of FY19.

The sample companies together added 61,610 net employees in the September 2018 quarter, the highest in four quarters. This coupled with rising traction in the revenue from the digital platform augurs well for the sector’s future growth prospects.