Topics In Demand
Notification
New

No notification found.

Tech Industry Insights: Q1FY25 Performance Overview
Tech Industry Insights: Q1FY25 Performance Overview

August 12, 2024

174

0

Financial Performance

Revenue Growth Trends

 

Indian Tech Companies: Q1FY25 has marked a significant rebound for Indian tech companies, particularly driven by mid-tier firms.

  • The top 6 companies witnessed a growth of 1.1% q-o-q after a decline of -0.2% in Q4FY24.
  •  ER&D companies experienced slower revenue growth due to deal ramp-up delays, softness in the EV segment, and seasonal impacts. However, there is optimism for recovery in the coming quarters.
  • Mid-tier companies driving growth with 3.7% q-o-q and 11.7% y-o-y.

Sector and Geographic Performance

  • BFSI grew 1.5% q-o-q with signs of recovery after continuous decline since Q1FY24.
  • While Telecom grew slightly by 0.6%. Both these verticals together account for approximately 60% of the industry revenue.
  • Manufacturing vertical decreased by 0.2% q-o-q due to pressure in the European automotive sector.

Geographic Performance:

  • US Market which contributes to 62% of the industry revenues grew by 1.1% q-o-q, marking the highest growth since Q4FY23.
  • EMEA Market declined by 0.1% q-o-q due to softness in the European manufacturing sector.

 

Global Tech Companies: Global tech companies also saw revenue growth, largely fuelled by advancements in cloud computing and AI.

 

Profit Margins:

 

  • Profit after tax fluctuated for Indian tech companies as they continued to invest in emerging technologies like AI and Gen AI.
  • In contrast, global tech companies experienced a y-o-y increase of 50 basis points in net profit margins as they see prior investments in AI and cloud technologies now giving them return.

 

 

Employment Trends

 

Indian Tech

  • There has been a notable shift in net employee additions, improving from a net reduction of 11,016 in Q4FY24 to a net addition of 668 in Q1FY25.
  • This positive trend is expected to continue with companies planning to hire approximately 80,000 freshers in FY25.

Global Tech

  • Headcount grew with a net addition of 7,600 (approx.) compared to a net reduction 4000 (approx.) in Q4FY24.

 

 

Operational metrics and deal pipeline*

  • The client base for the top six companies continued to decline for the sixth consecutive quarter since Q4FY23.
  • Attrition rates stabilized at 12.7% in Q1FY25, after dropping for seven consecutive quarters since Q3FY23.
  • The deal pipeline remains robust with a Total Contract Value of USD 19.6Bn.

 

 

 

*Analysis based on top six companies including TCS, Infosys, HCLTech, Wipro, TechM, and LTIMindtree.

 

Source:

 - Nasscom

- Company website

 - https://www.newindianexpress.com/business/2024/Jul/26/it-companies-hiring-to-see-positive-traction-in-second-half

 - https://timesofindia.indiatimes.com/business/india-business/it-companies-witness-increase-in-demand-and-boost-staff-count/articleshow/111911017.cms


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


images
Prajwal Pandey
Research Analyst

© Copyright nasscom. All Rights Reserved.