India's three biggest IT service providers have posted mammoth global revenue growth during 2021's third quarter, according to new analysis by GlobalData.
The analyst firm claimed India’s leading IT services trio Infosys, Tata Consultancy Services (TCS) and Wipro reflect the increasing demand for digital transformation and technologies such as cloud amid the ongoing COVID-19 pandemic.
Infosys, TCS and Wipro recorded a quarter-on-quarter (QoQ) revenue growth of 7.6 per cent, 3.2 per cent and 3.3 per cent, respectively, GlobalData reported.
“Cloud and digital transformation continue to be dominant themes ensuring robust revenue growth for Infosys, TCS and Wipro," said Saurabh Daga, technology analyst at GlobalData.
"For example, Infosys’ largest deal (US$3.2 billion) [to] date is an ongoing multi-year contract signed in December 2020, involving infrastructure upgrade and hybrid cloud migration for Daimler Motors."
Daga also cited TCS' 10-year contract to digitally transform Transport for London with a cloud-based smart mobility platform, which it won in September 2021. Most recently, in December 2021, Wipro won a five-year, US$44.5m contract to provide data center services and accelerate migration to hyper cloud for UK-headquartered utility provider National Grid.
However, vertical-wise, the revenue mix of these three companies is still heavily dominated by banking, financial services and insurance customers, with the sector making up 31.5 per cent, 38.9 per cent, and 35.2 per cent of the Q3 revenues for Infosys, TCS and Wipro respectively, Daga added.
Meanwhile, talent retention remains a major issue for Infosys and Wipro in particular, indicating the effects of the so-called Great Resignation on the IT sector, according to the analyst firm,.
“Amidst the strong growth tailwinds, talent management remains the biggest challenge, especially for Infosys and Wipro, with attrition rates of 25.5 per cent and 22.7 per cent, respectively," Daga continued.
TCS, meanwhile, reported relatively low attrition rates of 15.3 per cent, but this was higher compared to its Q2 attrition level of 11.9 per cent.
"While these companies are trying to negate the effects of attrition through mass fresher hiring and increasing the compensation for the senior professionals, the steps are also likely to impact their operational margin in the near-term," Daga added.