scorecardresearchTCS vs Infosys: Here's how India's two IT behemoths compare to one another
Q4 Results Comparative study of Infosys and TCS
Q4 Results Comparative study of Infosys and TCS

TCS vs Infosys: Here's how India's two IT behemoths compare to one another

Updated: 19 Apr 2022, 01:52 PM IST
TL;DR.

Infosys stock has risen 17 percent in the last year, compared to an 11 percent rise in TCS, and the stock has risen 123 percent in the last three years when compared to a 63.8 percent increase in TCS.

TCS and Infosys, have announced their Q4 results. Tata Consultancy Services (TCS) announced its Q4FY22 results on April 11th, 2022, while Infosys released the results for the same quarter on April 13th, 2022. Both Infosys and TCS results are in line with market expectations.

Let us analyse and compare the performance of these two IT firms.

Revenue Growth

TCS's consolidated revenue in the January-March quarter was at 50,591 crore, a 16 percent increase over the previous quarter. On a quarterly basis, revenue has climbed by 3%. In constant currency, revenue increased 14.3 percent year on year (YoY).

 

Revenue growth
Revenue growth

While Infosys' revenue increased by 23 percent year on year to 32,276 crore during the reported quarter. On a quarterly basis, the growth rate has been 1%. During the same quarter of the previous year, the company posted consolidated revenues of 26,311 crore. Its revenues for the period from October to December were 31,867 crore.

Profit after tax

Infosys has reported a profit after tax (PAT) of 5,809 crore.

Profit after Tax - Infosys - TCS
Profit after Tax - Infosys - TCS

TCS ended the financial year with a record 9,926 crore net profit.

Free Cash Flows

Infosys generated 5,769 crore in free cash flow during the quarter as compared to 5,399 crore generated in the previous quarter. TCS generated 10,259 Cr in free cash flow in Q4FY22.

Free Cash Flows of Infosys and TCS
Free Cash Flows of Infosys and TCS

Attrition rate

Infosys' attrition rate increased by 2.2% to 27.7% in Q4FY22.

 

Attrition rate (%)
Attrition rate (%)

The TCS attrition rate stood at 17.4%. The company added 35,209 employees during the quarter

Client addition

During the year, TCS added 10 clients to the $100 million+ bucket; 19 clients were added to the $50 million+ bucket; 40 clients were added to the $20 million+ bucket, and 52 clients were added to the $10 million+ bucket.

Infosys added 110 new clients during the quarter. The company had 1,741 active clients at the end of FY22, with the top 5 clients contributing 11.8 percent of the revenues, the top 10 clients contributing 19.4 percent of the total revenues, and 35.4 percent of the total revenues coming from the top 25 clients.

Geographical

Infosys - On the geographical front, North America stood as the company's largest contributor with a 61.4 percent revenue share, growing at a healthy 18.2 percent year on year. 

Europe grew at a 22.2 percent annual rate while maintaining its 25.2 percent revenue share. 

India’s share of total business stood at 3.2 percent with an on-year growth of 25.9 percent, while the rest of the world grew by 9.6 percent to generate 10.2 percent of the company’s revenues.

TCS - North America, the company's largest market rose by 18.7 percent during the quarter, while the UK and Continental Europe expanded by 13 and 10.1 percent, respectively. 

Latin America experienced robust growth of 20.6 percent among emerging economies, while the Middle East and Africa increased by 7.3 percent. 

The company's business in India increased by 7%, while the Asia Pacific market increased by 5.5 percent.

Full-year growth in North America was 17.5 percent, 15.1 percent in Continental Europe, and 14.3 percent in the United Kingdom. Except for the Asia Pacific, emerging markets had double-digit growth in the mid-to-high teens

Business Performance

During the quarter, TCS generated good growth in the majority of verticals. Life sciences and healthcare grew 16.4% year on year.

 BFSI grew 12.9% year on year, manufacturing grew 19% year on year, and technological services grew 18% year on year. 

Furthermore, communication and media grew 18.7 percent year on year, while regional markets and others grew 4%.

Infosys on the vertical front, the BFSI/Retail/Communication verticals grew by 14.1 percent, 16.5 percent, and 29.2 percent, respectively. 

Life Sciences rose by 16.2 percent year on year, while the Manufacturing and Hi-tech verticals expanded by 45.3 percent and 20.5 percent, respectively. 

Stock Performance

 Stock Performance (%) Infosys    TCS               
 1 Year  17.42% 11.38%  
 3 Years 123.12 % 63.8%
 5 Years 248.11%               206.35%

Dividend

For the fiscal year ending March 31, 2022, Infosys recommended a final dividend of 16/- per equity share. The final dividend will be paid on June 28, 2022, with the record date being June 1, 2022.

TCS has recommended a final dividend of 22 per equity share The proposed final dividend shall be paid on the fourth day from the conclusion of the 27th Annual General Meeting, subject to the approval of the shareholders of the Company.

Note: This story is for educational purposes only. Please speak to a financial advisor before investing.

These are the types of ratios used to analyse a company's performance.  
These are the types of ratios used to analyse a company's performance.  
First Published: 19 Apr 2022, 01:52 PM IST