Indian IT services exporters Infosys and Tata Consultancy Services (TCS) posted a decline in consolidated net profit on a sequential basis even as profits rose from the year-ago period.
The IT firms, however, achieved higher revenues on a sequential and year-on-year (YoY) basis.
Infosys declared its first quarter results for the 2016-17 fiscal on Friday. The company recorded a 4.47 decline in consolidated net profit sequentially for the quarter ended June 30, 2016 even as profits rose by 13.4 percent on a YoY basis.
"We had unanticipated headwinds in discretionary spending in consulting services and package implementations as well as slower project ramp-ups in large deals that we had won in earlier quarters, resulting in a lower than expected growth in Q1," said Dr. Vishal Sikka, CEO, Infosys on the company's Q1 earnings for the fiscal 2016-17.
On Thursday, Mumbai-based TCS had also recorded a marginal decline of 0.4 percent in consolidated net profit on a sequential basis, while profits rose by 9.4 percent over the corresponding quarter last year.
In revenues, Bengaluru-based Infosys registered a growth of 1.4 percent sequentially and 16.9 percent YoY for the June 30, 2016 quarter. TCS revenues had recorded a sequential rise of 3 percent and a 14.16 percent YoY growth for the quarter under review this fiscal.
In dollar terms too, both Infosys and TCS posted higher revenues on a sequential and YoY basis for the quarter ended June 30 this year. Infosys achieved a 2.2 percent quarter-on-quarter growth in revenues, while TCS recorded a sequential growth of 3.7 percent. On a YoY basis, Infosys and TCS posted a comparable growth of 10.9 percent and 8.1 percent respectively.
The two IT firms revealed contrary trends in employee retention. While TCS attrition declined for the third consecutive quarter by 13.6 percent, Infosys recorded a 21 percent attrition rate, up by around 4 percent from the March 2016 quarter.
Shares of Infosys stood at Rs. 1071.80, down by 8.85 percent from its opening margin at 12:48 p.m., while TCS shares fell by 3.10 percent at Rs. 2442.15 in the Bombay Stock Exchange.