The New York Stock Exchange (NYSE) saw a significant decrease in the American Depository Receipt (ADR) shares of Infosys and Wipro, the top IT service providers in India, following the release of their July–September quarter results for fiscal 2024–25 (Q2FY24). On the American stock exchange, Infosys ADR fell 3% to $21.6 despite the big IT company raising its FY25 sales forecast.
Even though the fourth-largest IT major in India, Wipro, recorded huge deal bookings of $1.5 billion in the September quarter—the most in ten quarters—the company’s ADR fell by roughly three per cent to $5.9 on the NYSE. The S&P 500 and Dow Jones Industrial Average were heading towards all-time highs, while Wall Street was expected to open higher. Despite this, the ADRs of the Indian IT titans were trading down.
Similar to ordinary shares of US companies, international and multinational corporations can trade on US stock exchanges using American Depositary Receipts (ADRs). An ADR is comparable, theoretically, to a unique certificate that is issued by a US bank.
Infosys Q2 Results
Infosys announced a 4.7% increase in consolidated net profit to ₹6,506 crore from ₹6,212 crore in the same period the previous year. The second-biggest information technology (IT) service provider in India saw a 5.1% increase in operating revenue to ₹40,958 crore in the second quarter of the current fiscal year, up from ₹38,994 crore in the same period last year.
Revenues increased 3.3% year over year and 3.1% sequentially in constant currency (CC) terms. Profits before interest and tax, or EBIT, increased 4.4% sequentially to ₹8,649 crore from ₹8,288 crore in the June quarter prior. With revenue of $4.894 billion in US dollars, there was a 3.8% increase over the previous June quarter.
The board of the IT major announced an interim dividend of ₹21 per equity share, with October 29, 2024, set as the dividend record date. Infosys further stated that the interim dividend will be paid out on November 8, 2024.
The computer company headed by Sahil Parekh increased its revenue forecast for FY25 due to a general uptick in demand, especially from its important banking sector clientele. For the second quarter in a row, the bellwether has increased its sales forecast for the entire fiscal year. Rather than sticking to its July guidance of 3 to 4 per cent, it now projects constant currency sales growth for the current fiscal year between 3.75 and 4.5 per cent.
The increase comes after a surge in large-scale transactions. Infosys, however, stuck to its margin projection for the entire year. It projects operating margins, or EBIT margins, to range from 20% to 22% for the fiscal year.
The total contract value (TCV) of the big deals was $2.4 billion. For the first time in seven quarters, headcount rose. With roughly 2,000 fewer workers after the previous quarter, Infosys added nearly 2,500 in the September quarter. In comparison to the previous June quarter, when it was 12.7%, the attrition rate increased to 12.9%.
Wipro Q2 Results
Despite providing a dismal revenue estimate for the upcoming quarter, the top IT giant reported a 21.2% YoY increase in its consolidated net profit to ₹3,208.8 crore for the July–September quarter, driven by greater operating profit. In the same quarter last year, Wipro reported a profit of ₹2,646.3 crore.
In Q2 of the current fiscal year, revenue from operations was ₹22,301.6 crore, down 0.95 per cent from Q2 of FY24’s ₹22,515.9 crore. The board of Wipro authorised the bonus issue of shares at a 1:1 ratio of ₹2 per share, with the announcement of the bonus issue record date to follow.
The rate of voluntary attrition at Wipro rose from 14.1 per cent in the June quarter prior to 14.5% in the current quarter. There are 233,889 workers as of right now. The company’s operating cash flows increased by 10.5% YoY to ₹42.7 billion, or 132.3 per cent of its net income for the quarter.
