Booming balance sheets for India's big four outsourcers after horrible quarter at home

Hiring sprees planned to keep up with demand across many sectors and around the world


India's big four IT services providers – HCL, Infosys, Tata Consulting Services, and Wipro – have all come through the country's savage second wave of COVID-19 with impressive financial results and huge appetites for hiring new talent.

The four giants all featured mention of COVID-19 and its impact on their businesses in their Q1 2022 earnings calls. All offered tales of efforts to care for staff and the wider community, and lamented tragedies that befell workers and their families.

But all also reported exceptional results. Infosys posted its strongest ever growth. Wipro hired more people in a quarter than at any time in the preceding decade, while TCS hired more people in a quarter than ever before.

Summary of Q1 FY22 results for HCL, Infosys, TCS, and Wipro

  Q1 revenue US$ YoY growth % Net Income US$ YoY growth % Hiring trends % of staff vaccinated
HCL $2.7bn 15.5 $436m 12.8 7.5k new hires ~70
Infosys $3.8bn 16.9 $704m 26 Plans 35k grad hires, up from 25k 58
TCS $6.1bn 21.6 $925m 18.3 Record 20.4k hires, 40k more planned >70
Wipro $2.5bn 22.4 $435m 35.2 12k new hires, most in a decade ~56

All four companies reported strong demand around the world, and all said they'd landed big multi-year deals.

Infosys saw financial services clients in North America resume big projects. Wipro found the health sector in tip-top shape. HCL saw strong growth in the telecom and media sectors, and said efforts related to the portfolio of software it has acquired from IBM are moving from stabilising customers into growth mode.

Tata's retail business reached an all-time high in terms of forward bookings, and the company also saw clients in the transport sector bounce back.

While the four companies all see brighter days ahead, that has caused twin problems: more staff are needed, and those already on the books have seen the easing of the pandemic as the moment to consider a new gig.

Wipro CEO Thierry Delaporte put it nicely: "The dramatic shift to a remote working environment has made labour across all sectors and markets more mobile and liberated."

Attrition rates are therefore up, and hiring efforts have been increased. The situation is good news for workers – especially graduates – because Infosys alone has increased its planned intake of freshers from 25,000 to 35,000 this year. But all four companies know that upward pressure on wages is unavoidable, and that hiring won't get easier.

All bar TCS – which chooses not to offer future guidance – predicted further growth.

Wipro expects growth of between 5 and 7 per cent, which will take the company past the $10bn annual revenue mark. Infosys has lifted annual revenue growth guidance to between 14 and 16 per cent, compared to its previous 12 to 14 per cent. HCL said it is "very, very, confident" of growth. While it didn't advance its previous predictions, execs said it has the "highest pipeline" in company history and suggested that can only be good for its finances.

All four companies were upbeat about their prospects – not least because they expect to have vaccinated almost all their staff against COVID-19 and believe that similar efforts worldwide will accelerate the global economy. ®

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