For the March quarter, revenue fell by 1% sequentially to $7,465 million compared with the analysts’ average expectation of 0.7% drop. In rupee terms, revenue grew by 0.8% to Rs64,479 crore while net profit fell by 1.3% to Rs12,224 crore. Analysts had expected revenue and net profit to grow by 1.3% and 1.6% respectively. In addition, operating margin (EBIT margin) shrank by 30 basis points sequentially to 24.2% in contrast with the expectation of 40-50 basis point improvement.
A look at the full year data reveals that the company has focussed on retaining the operating margin in a tight range even though the revenue growth has tapered since FY22, when it had reported an exceptional 15.9% jump on a low base of 0.6% growth in the prior year which was impacted by the onset of the Covid pandemic. For FY25, revenue grew by 3.8% to $30,179 million, slower than in the previous two years while margin at 24.7% was the highest during the said period. This shows its ability to utilise levers to retain profitability during tough demand scenarios.
A continued focus on investments to improve capabilities is another positive. The company carried out a capex of over Rs 4,977 crore in FY25, implying a growth of 88% over the FY24 outgo of Rs2,650 crore. It was deployed to expand infrastructure, to enhance technical skills and capabilities of staff, and to strengthen business partnerships.
The deal momentum improved during the fourth quarter as the company bagged $12.2 billion worth of new projects. It was commendable since there were no mega deal wins to drive the number, unlike in the year-ago quarter when it had clocked the total contract value of $13.2 billion, the highest ever quarterly new deal wins.
While the attrition rate inched up by 30 basis points sequentially to 13.3% in the March quarter, the management did not consider it challenging. It expects to add over 42,000 fresh recruits from college campuses, similar to the previous year. While this reflects its confidence in the long term demand scenario, it has deferred salary increase until further notice in the wake of rising short term uncertainties.The stock is available at a trailing price-earnings (P/E) multiple of 25.6 compared with a five year average valuation of 30. The discounted valuation reflects the pressure on the stock in recent months amid demand uncertainties. The stock has lost nearly 21% in 2025 so far. It was last traded at Rs 3,246.1 on April 9 on the BSE.
