INSUBCONTINENT EXCLUSIVE:
Infosys showed stronger momentum in dollar-denominated revenue than larger peer Tata Consultancy Services (TCS) for December quarter in
reported as well as constant currency (CC) terms.
The operating margin though fell significantly by 110 basis points to 22.6% following
adjustments pertaining to fair values of Panaya and Skava, two divisions that Infosys is in process of selling.
Despite better sales
traction, investors waiting for company to report a better topline growth in current fiscal than TCS may have to wait
Given slower growth in previous quarters when compared with TCS, Infosys would find it difficult to overtake latter in growth momentum for
TCS may therefore post a better full-year revenue growth for third consecutive fiscal in terms of reported currency rates.
IT stocks may
show greater volatility following turbulent currency markets
was only a matter of time given gradually rising year-on-year growth in revenue since June 2018 quarter
capital allocation guidance.
A continued traction in digital revenue reported by TCS and Infosys augurs well since it reflects readiness of
Both TCS and Infosys now earn nearly onethird of revenue from digital services.
In short-term, IT stocks may show greater volatility
following turbulent currency markets
The long-term trend however looks promising.
