Dismal performance of Infosys in the first-quarter

Infosys is no longer leading player in India’s IT sector. Infosys's dismal first-quarter performance proved that this company no longer represents the broader trends in the sector. As IT sector is booming, a strong demand emerges globally for IT outsourcing, it is very disappointing result for this IT giant. Infosys's first-quarter net profit missed expectations.

While Infosys’s biggest competitor and India’s largest IT player TCS is showing consecutive outstanding growth rate, Infosys’ result are very dull. 

While TCS has recovered from its loss and within 2 years till March 2011, they have started showing profit in sales and operations by 10% & 16%, Infosys recorded 8% and 8.1% growth respectively.

While talking to the media a senior official of Infosys told that they are looking forward to a stronger second half compared to the first half.

Strange is that even smaller competitors of Infosys like Cognizant and HCL Tech, have been able to take advantage of the rebound in demand to register better growth, but Infosys strategy fails largely. Therefore it raises some serious questions over the strategies and plans that Infosys depends upon.

The reason management of Infosys gives that the performance was hit badly due to wage hikes. But India’s second largest IT Company used to show path to others how to curb the wage hikes and still register significant profitable growth. This time around it was severely missing.

Results of TCS for the Last Quarter Ending 31st March 2011

Tata Consultancy Services Ltd (TCS), belonging to the Tata Group, has declared its results for the last quarter (Q4) ending March 2011. The Net profit of TCS has risen to Rs.2,402 crores ($542 million) and the company has shown a growth of 23% in the last quarter - far beyond the market expectations.

Founded by J.R.D Tata in 1968, Tata Consultancy Services Ltd, founded by J.R.D.Tata in 1968, is  populalry known as TCS. TCS, with its headquarters in Mumbai, has offices in 47 countries and has over 140 branches worldwide.

TCS is the second largest provider of business process outsourcing (BPO) in IT sector in India. It is also the largest provider of software services in Asia. It provides business solutions to many corporate housesacross the globe.

N. Chandrasekaran, the CEO & MD of TCS expressed his satisfaction and told media, "Excellent execution and a constant focus on the customer has helped TCS round off a sterling performance in FY11 with strong growth in the fourth quarter while maintaining margins at historic highs."

"We continue to shape the adoption of next generation technologies by investing in new areas like mobility, analytics, social media and sustainability solutions," he added.

S. Mahalingam, Chief Financial Officer and Executive Director of TCS, said: "We have created a structurally robust cost base that is able to withstand a dynamic demand environment. The strength of this model can be seen from the steady improvement we have shown in operational and profitability parameters over the last four quarters."

With its services in areas like Assurance, Infrastructure Services, Products and Enterprise Solutions, TCS is growing rapidly.