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Healthcare IT Services - The Scorecard for Q1

August 5, 2016

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The big Indian firms are not showing much growth in healthcare and are struggling with their legacy offerings and positioning ( Wipro seems to have had a QoQ bump due to the HPS merger going into effect). Infosys in particular seems to be struggling.

Indian IT majors TCS, Infosys, and Wipro announced their results for the quarter ended June 30, 2016. Wipro and Infosys had a weaker quarter compared to TCS

Infosys’s healthcare IT revenue seems to have declined by 3.79%. Infosys had reclassified its portfolio last quarter to combine the Insurance and healthcare verticals, making it harder to draw comparisons. Media reports suggest that the cancellation of a major deal from the proposed merger of drug makers Pfizer Inc. and Allergan Plc., might have led to the company missing its forecasts. In the wake of a weak performance for the quarter, the company has announced management changes, including leadership changes in the healthcare business.

TCS seems to have grown the healthcare business by 3.90 % QoQ, and the contribution of healthcare IT revenues to total revenues has remained steady at 7%. TCS announced three client wins in healthcare.

Wipro’s healthcare revenues indicate a 46% QoQ growth, partly due to the impact of the Health Plan Services (HPS) acquisition in Q4 2015. There is a corresponding drop in OM for the healthcare business from 19.96% to 14.33%. Overall margins for the company have dropped due to compensation increases as well as the HPS merger.

Both TCS and Wipro announced multiple new client wins.

Download our complimentary report for a detailed update on the healthcare IT services market in July.


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