Recession In India | Layoff In IT companies
IT giants Tata Consultancy Services (TCS) and Infosys have declared their fourth-quarter earnings and both tech biggies have missed Street estimates. The only positives have been that both have won large deals and their attrition rates have come down. But Financialli was really impressed.
According to TD Cowen’s report, Infosys has missed revenue/EPS by -3%/-5% and initial outlook growth (4-7% y/y CC) as well. OM (20-22%) is also missed. Revenue and operating margin have also dropped. The TCS is also in a very difficult situation.
The same trend has also been seen in other companies like – Wipro, Tech Mahindra, and HCL Technologies.
What is the reason that all Indian listed companies are showing muted growth in this quarter?
IT companies have blamed America’s banking crisis to a great extent. Because after the banking crisis, the spending projects have been reduced and its direct effect is visible in the results of IT companies this Q4.
Yes, all the exporters of the company have blamed the uncertainty of the banking, financial services, and insurance segment because all the clients have Since then all the clients thought of conserving their cash. because of the North American market crash.
the way Silicon Valley Bank and Credit Suisse closed, BFSI clients will focus on their current survival and future survival, which will lead to pressure on current spending, and indirectly on IT companies.
And for a long time, IT companies are also talking about job cuts.
Tech companies are making huge layoffs and IT companies are also making huge layoffs in 2023 and are planning to do so.
Accenture has already cut 19,000 jobs. Apart from this, Indian IT companies have already stopped hiring in Q2, and hiring has declined by 96% in the preceding 7 quarters.
All four major IT companies, TCS and Wipro have reported a decline in headcount this quarter. Due to recession and inflation, IT companies are going to cut off. IT companies in the United States are also cutting off, and now Indian companies are also following the same pattern.
This is what is happening in the IT and Tech sector, and this is the reason why their shares are also affected. And FDI is also withdrawing a lot of money from the Indian market.
Overall, due to inflation, the banking crisis, and the recession, many tech and IT companies are affected, and this is the reason why their stocks are falling.
So Should You Buy These Stocks?
Well, if your perspective is long-term then you can take this low-price May entry and take potential profits.