India’s IT sector has been on a steady rise after the turbulence the first half of 2020 caused. On Wednesday, major IT and consulting firms Infosys and Wipro released their third-quarter profits, following Tata Consultancy Services Ltd., which released theirs on Monday.
The figures for each company were much better than expected. Infosys reported nearly 16.6% YoY growth in its net profit during the fiscal third quarter ended December 31, 2020. While the net profit of Wipro Limited increased a strong 20.8% YoY, to ₹29.7 billion ($406 million). TCS reported the least growth in its quarterly revenue for fiscal Q3 2021.
TCS Reported Strongest 3rd Quarter in 9 Years
The December quarter revenue of TCS amounted to Rs 42,015 crore, with 5.42% YoY growth. The company said it was their strongest third quarter in last 9 years. When compared to the previous first two quarters of fiscal 2021, the company reported mere 2.97% YoY and 0.39% YoY growth in revenue during September and June quarter, respectively.
Interestingly, the quarterly revenue of Infosys increased an appreciable 12.3% YoY during FY Q3 2021, to Rs 25,927 crore. Additionally, the company reported that the total contract value of large deals they made in Q3 approximated to $7.13 billion, including big names such as Rolls Royce.
On the other hand, Wipro reported the least growth in its Q3 revenue i.e. 1.29% YoY, despite reporting a strong 20.8% YoY growth in net profit.
Q3 Hiring: a Revival of the Workfroce
If these numbers are any indication, it can be inferred that the Indian IT sector, at least for the bigger players, is experiencing a rapid comeback.
While Q1 was slow, with hiring dipping into the negatives in June, these firms began bouncing back sometime in September, with a rapid increase in hiring by December. Thus, along with profit and revenue growth, TCS, Infosys, and Wipro also added numbers to their workforces in Q3, reported The Hindu’s Business Line on Wednesday.
TCS added 15,721 new employees to their fleet, making for a 59% increase as compared to the previous quarter. Furthermore, the CFO reported that this increase was the highest in the company’s history.
Meanwhile, Infosys hired about 9000 new employees, accounting for an 8-fold expansion of their workforce.
Lastly, Wipro reported addition of 5,056 new hires, a 47% increase in comparison to Q2.
IT Sector Least Affected by the Pandemic
Typically, hiring new employees is a fundamental sign of the health of a particular sector as it indicates that there is enough capital for expansion.
These reports are not the only instances of IT firms hiring in India. Recently, 6 startup unicorns revealed plans for holding hiring rounds starting this month and spanning throughout different quarters of the year.
At the same time, estimates suggest that in the past two months, 80,000 new employees have been recruited in IT firms all over the country. Technological skills like application and product development are in the highest demand, however, posts for almost all departments are opening up.
The salience of the tech industry has grown during the pandemic as a large number of people and institutions have switched to remote work and learning, requiring large scale IT solutions and support. At the same time, growth in Asia, and consequently India, has accelerated due to a shift back to outsourcing to cut costs.
According to TeamLease, a contract hiring firm, IT hiring will grow by 10-12% in 2021, globally. They further added that contract hiring has gone back to 75% of its pre-pandemic capacity.