More pressure ahead for IT sector

TCS's quarterly dollar revenues rose 2% sequentially in constant currency terms

The two information technology (IT) bellwethers Infosys and TCS have both delivered first quarter results worth comment. Infosys beat consensus expectations on revenue and margins and retained guidance for the fiscal. TCS underperformed consensus and saw reduction in headcount. Both companies sounded fairly upbeat, but it's not clear if the bad times are over.

In sequential terms, Infosys saw marginal revenue growth of 2.7 per cent to $2.65 billion (dollar constant currency), while it saw marginal erosion of profitability. Net was up about 1.3 per cent year-on-year (y-o-y), while net profits fell by 0.4 per cent sequentially to $541 million.