Based on the recent second-quarter Q2FY25 results released by Indian IT Industry like TCS, Infosys, HCLTech, Wipro, Tech Mahindra, LTIMindtree, etc., the industry is showcasing strong signs of revival compared to previous quarters.
Here’s a breakdown of the key indicators:
1. Total Headcounts: Increase in Hiring
The recent headcount figures from the second-quarter results of major Indian IT companies show clear signs of recovery and renewed hiring momentum.
Here’s a breakdown of the workforce changes in TCS, Infosys, Wipro, HCLTech, Tech Mahindra, and LTIMindtree:
| Company | Q4 FY24 | Q1 FY25 | Q2 FY25 | Addition/Drop |
|---|---|---|---|---|
| TCS | 6,01,546 | 606,998 | 612,724 | +5,726 |
| Infosys | 3,17,240 | 315,332 | 317,778 | +2,456 |
| Wipro | 2,34,054 | 232,911 | 233,889 | +978 |
| HCLTech | 2,27,481 | 219,401 | 218,621 | -780 |
| Tech Mahindra | 1,45,455 | 147,620 | 154,273 | +6,653 |
| LTIMindtree | 82,738 | 81,934 | 84,438 | +2,504 |
Key Observations:
- TCS added 5,726 employees in Q2 FY25, reflecting a consistent hiring trend. This indicates a positive outlook for future projects and growth in demand for services like cloud, AI, and digital transformation.
- Infosys showed a net addition of 2,456 employees in Q2 FY25, signaling stable growth in its workforce. This is in line with the company’s strategic focus on expanding its digital and AI capabilities.
- Wipro saw a marginal addition of 978 employees, which signaled stable growth in its workforce
- HCLTech experienced a drop of 780 employees in Q2 FY25, reflecting a more cautious approach, likely influenced by realignment or operational efficiency measures.
- Tech Mahindra showed the most significant increase, adding 6,653 employees, which signals strong business momentum, particularly in areas like telecommunications, cloud, and AI.
- LTIMindtree added 2,504 employees, marking steady growth and indicating positive traction in its business areas, especially with an increasing focus on digital solutions.
2. Increase in Generative AI Engagements
The FY25 Q2 results for Indian IT showcase significant advancements in the integration of generative AI across major players.
Tata Consultancy Services (TCS) reported a remarkable increase in generative AI engagements, jumping from approximately 270 last quarter to over 600 this quarter. TCS Chief K. Krithivasan highlighted that production-ready projects surged from eight to 86, signaling a maturation in their generative AI initiatives.
Infosys is also making strides, deploying small language models and multi-agent solutions that embed generative AI into nearly every client engagement. CEO Salil Parekh noted that generative AI has become crucial for large programs, transformation projects, and cost-efficiency initiatives.
Wipro is focused on building an “AI-powered Wipro” through AI-driven consulting and comprehensive employee reskilling efforts. CEO Srini Pallia expressed confidence that generative AI will yield positive results for both the company and the broader industry.
HCLTech emphasized its AI Force platform as a key differentiator in client solutions, leveraging strategic cloud partnerships.
LTIMindtree, meanwhile, is adopting an “AI in everything” strategy, successfully integrating AI into operations and client projects, particularly in manufacturing, financial services, and energy sectors.
Collectively, these developments show the transformative potential of generative AI in the Indian IT landscape.
3. Strong Recovery of the BFSI Sector
The BFSI (Banking, Financial Services, and Insurance) sector, which accounts for about 30-34% of Indian IT companies’ business, is showing strong recovery as reflected in the Q2 results.
Major IT firms reported increased demand for services tailored to BFSI clients, driven by enhanced technology investments in digital transformation, cloud solutions, and AI.
4. Revenue Growth in Q2
Another sign of revival in the Indian IT sector is the increase in revenue for Q2 FY25. The financial results reflect a positive trajectory across major companies:
- Tata Consultancy Services (TCS) reported a revenue increase from ₹62,613 crore in Q1 FY25 to ₹64,259 crore in Q2 FY25.
- Infosys saw revenue rise from ₹39,315 crore to ₹40,986 crore during the same period.
- HCLTech experienced an increase from ₹28,057 crore to ₹28,862 crore.
- Wipro reported a growth from ₹21,964 crore to ₹22,300 crore.
- Tech Mahindra‘s revenue grew from ₹13,005 crore to ₹13,313 crore.
- LTIMindtree also saw an uptick, with revenue increasing from ₹9,143 crore to ₹9,433 crore.
This upward trend in revenue signals renewed confidence and demand within the industry, contributing to the overall recovery of the IT sector.
Global IT spending is on the rise, especially in North America and Europe. This rebound, coupled with steady growth in emerging markets, suggests that IT budgets are returning to pre-pandemic levels, fueling the revival of the industry.
5. Low Attrition and Rise in Profit Margins
Another sign of recovery in the Indian IT sector is the low attrition rate, which is translating into higher profit margins.
The following data highlights the attrition rates for major IT companies from Q2 FY24 to Q2 FY25:
- Tata Consultancy Services (TCS): Attrition decreased from 14.9% in Q2 FY24 to 12.3% in Q2 FY25.
- Infosys: Attrition dropped from 14.6% to 12.9% during the same period.
- Wipro: The company saw a slight improvement, with attrition falling from 14.2% to 14.5%.
- HCLTech: Attrition decreased from 15.5% to 12.9%.
- Tech Mahindra: The attrition rate went down from 11.0% to 10.6%.
- LTIMindtree: Attrition decreased from 15.2% to 14.5%.
Low attrition rates lead to higher profit margins as organizations can retain experienced employees, reduce recruitment and training costs, and maintain productivity levels.
This stability allows companies to focus on strategic initiatives, ultimately enhancing their financial performance and contributing to the overall recovery of the IT sector.
Conclusion
Recent quarterly results suggest a cautious revival in the IT industry, characterized by an increased focus on both lateral and campus hiring.
Additionally, moderate salary hikes are expected in the coming quarters, balancing the need for competitive compensation with effective cost management as organizations position themselves for sustainable growth.
Note: We are also on WhatsApp, LinkedIn, Google News, and YouTube, to get the latest news updates, Subscribe to our Channels. WhatsApp– Click Here, Google News– Click Here, YouTube – Click Here, and LinkedIn– Click Here.
