Performance of IT Companies in Q4FY25 – Navigating an Uncertain Path

As Q4FY25 results emerge, major IT companies are showing a mixed performance. While most firms reported revenue growth, several saw a year-on-year decline in PAT. Management commentaries indicate a challenging financial year ahead, with multiple uncertainties weighing on the industry.

Additionally, results of IT companies in Q4FY25 suggest a decline in new hiring across IT firms, with most large companies reducing employee headcount as they navigate ongoing challenges.

One of the biggest concerns is the proposed tariffs on goods entering the US from other countries, which has unsettled large American corporations. This uncertainty has led to a slowdown in order placements and deal decisions, as companies adopt a cautious approach.

Tata Consultancy Services (TCS)

TCS delivered subdued performance in Q4FY25, with revenue increasing by 5.29% over Q4FY24 to ₹64,479 crore, but PAT declining by 1.67% to ₹12,293 crore. Margins were under pressure, with the EBIT margin falling by 180 basis points and the Net Margin dipping by 135 basis points compared to Q4FY24.

The company added 625 net new employees in the quarter and secured 2 large clients ($100+ million), along with new deal TCV of $12.2 billion.

TCS faced slowness in the North American market, as its revenue contribution dropped from 50% in Q4FY24 to 48.2% in Q4FY25. However, the Indian market showed good growth, despite being relatively smaller. The Banking, Financial Services, and Insurance (BFSI) segment remained the largest revenue driver, contributing 31.2% of total revenue, while other segments declined in constant currency terms. During Q4FY25, TCS applied for 267 patents and was granted 235 patents.

The board recommended a final dividend of ₹30 per equity share.

Infosys

Infosys reported weak results for Q4FY25. Revenue grew by 7.92% year-on-year to ₹40,925 crore, but PAT fell by 11.75%, with EBIT for the quarter standing at ₹8,575 crore. Financial Services contributed 28.4% of revenue, while North America remained the top market, accounting for 57.1% of revenue, despite a slight dip.

Margins showed mixed trends, with EBIT margin improving by 86 basis points, but Net Margin declining by 383 basis points year-on-year.

Employee headcount increased marginally, with 199 net additions during the quarter. The attrition rate ticked up slightly, rising from 13.7% in Q3FY25 to 14.1% in Q4FY25. Infosys reported a large deal TCV of $2.6 billion during the quarter.

The board recommended a final dividend of ₹22 per equity share.

Here is the current investor presentation of Infosys.

The Webcast Presentation: Infosys Q4FY25 Earnings Call

Wipro

Wipro delivered a strong performance in Q4FY25, deviating from broader industry trends. Revenue increased modestly by 1.33% year-on-year, reaching ₹22,504 crore, while PAT surged by 26% to ₹3,588 crore. EBIT for the quarter stood at ₹3,931 crore, reflecting an 11% growth.

Margins showed improvement, with EBIT margin rising by 153 basis points and Net Margin increasing by 307 basis points compared to Q4FY24. The operating margin for the quarter stood at 17.5%.

The Banking, Financial Services, and Insurance (BFSI) segment remained the largest revenue driver, contributing 34.2% of total revenue, while Americas accounted for 63.4% of revenue.

Wipro secured large deal wins totalling $1.8 billion during the quarter. Employee headcount increased by 614, bringing the total to 233,346 as of March 31, 2025. Net utilization rose to 84.6%, slightly higher than in Q3FY25, while attrition edged up to 15.0%. The number of active clients declined from 1,299 in Q3FY25 to 1,282 in Q4FY25. Notably, the company did not declare any dividend following its Q4FY25 results.

HCL Technologies

HCL Technologies delivered solid performance in Q4FY25, with revenue rising by 6% year-on-year to ₹30,246 crore. PAT grew by 7.86%, reaching ₹4,309 crore, while EBIT increased by 8.45%. Margins showed slight improvement compared to Q4FY24, with EBIT margin at 17.99%.

The HCL Tech Services segment remained the primary revenue driver, contributing 90.4% of total revenue. Geographically, the Americas led with 63.9% of revenue, followed by Europe at 29.2%. From a sector perspective, Financial Services accounted for 21.1% of revenue.

During the quarter, the company experienced some shifts in its client portfolio, losing one $50+ million client, while securing new deal wins worth $3 billion in total contract value (TCV). Workforce expansion continued, with 2,665 net new employees added, bringing total headcount to 223,420 as of March 31, 2025. Attrition for the quarter stood at 13.0%, reflecting a stable workforce trend.

The board of directors has recommended an interim dividend of ₹18 per equity share.

Tech Mahindra

Tech Mahindra delivered a strong performance in Q4FY25. Revenue increased by 3.98% year-on-year, while PAT saw a remarkable 76.51% jump, reflecting robust profitability. EBIT for the quarter stood at ₹1,405 crore, marking a 48.5% increase compared to Q4FY24.

Margins improved significantly, with the EBIT margin rising by 315 basis points and Net Margin increasing by 358 basis points year-on-year. The Communications vertical remained the largest revenue contributor, accounting for 33.2% of total revenue.

As of March 31, 2025, active client count stood at 1,162, reflecting a net decline of 14 clients compared to December 31, 2024. The company secured new deal wins worth $798 million in TCV during the quarter.

Employee headcount at the end of Q4FY25 was 148,731, 2,627 lower than in Q3FY25. The attrition rate stood at 11.8%, while utilization improved to 86.3%, exceeding the previous quarter’s levels. Tech Mahindra reported a Free Cash Flow (FCF) of $150 million for the quarter. The board of directors proposed a final dividend of ₹30 per equity share for FY25.

LTIMindtree

The company reported a mixed set of numbers. Revenue for the quarter increased by 9.9% over Q4FY24, while EBIT grew by 2.8%. PAT for the quarter was ₹1,128 crore, a 2.5% year-on-year increase. The EBIT and net margins decreased slightly compared to Q4FY24.

For the financial year FY25, revenue increased by 7% year-on-year. The number of clients contributing over 5 million and 50 million each increased by one in FY25.

Notable deal wins include:

• A leading US life insurance company for enhancing quality processes using AI
• A global energy major for NextGen ERP support services
• A leading global financial institution for a Data Center Migration Project
• A North American utility company for Application Managed Services
• A global reinsurance group to enhance efficiency through an AI Ops model
• A North American life sciences company for an Oracle implementation and maintenance project
• A leading US materials and construction company for supporting its legacy ERP system
• A digital company in Saudi Arabia for providing end-to-end operation services

At the end of Q4FY25, the company had 741 active clients. The BFSI segment contributed 37.1% of the revenue. Geographically, North America remained the largest market with 74.5% of the revenue contribution. Utilization was high during the quarter at 85.8%. The company reported a decline of 497 in employee headcount between December 31, 2024, and March 31, 2025. Attrition during the quarter was 14.4%.

The board of LTIMindtree has recommended a final dividend of ₹45 per equity share.

Tata Elxsi

Tata Elxsi reported underwhelming financial results. While quarterly revenue, bolstered by a weaker currency, rose by 0.3% compared to Q4FY24, the EBITDA and PAT figures experienced significant declines. EBITDA decreased by 20.5%, while PAT dropped by 12.5%.

Margins for the quarter also suffered considerable reductions, with the EBITDA margin falling by 598 basis points and the Net margin declining by 276 basis points.

Several factors contributed negatively to Tata Elxsi’s revenue:

• A few projects in the Transportation segment were paused by clients.
• Caution across various industries regarding technology spending affected the revenue in the Media and Communications segment.

Europe remained the largest market for the company, accounting for 37.9% of total revenue. Although the contribution from Europe declined year-on-year, India’s share of revenue increased to 22.4%.

Among verticals, Transportation was the highest revenue generator at 53.4%, followed by the Media and Communications Vertical at 32.4%.

Key deals secured during the financial year include:

• A $100 million+ multi-year contract with a leading Media and Communications company for NextGen project engineering.
• A €50 million agreement with a European automotive OEM for platform and application development.
• A significant deal with a European Renal care MedTech company to enhance software functionality.
• A $10 million contract with a US-based global broadcaster for video streaming platform engineering.
• A multi-million dollar agreement with a leader in green energy for fleet management software for EVs.

The company reported a reduction in employee headcount, down by 464 in Q4FY25 to 12,414 from 12,878 in Q3FY25.

Tata Communications

The company’s revenue increased by 6% over Q4FY24, and EBITDA rose by 4.28% to ₹1,122 crore. PAT for the quarter was reported as ₹761 crore, which was a 114.7% increase over the PAT for Q4FY24. The significant jump in PAT for Q4FY25 was due to exceptional items of ₹577.79 crore, including a gain from the sale of property in Ambattur, Chennai, to an associate company, along with a one-time staff cost optimization expense of ₹82 crore. EBIT margin declined by 33 basis points.

Data Services remained the primary revenue driver, while Voice Solutions and Transformation Services experienced a decline in revenue compared to Q4FY24. Revenue distribution was divided as 42% from India and 58% from international markets. As of March 31, 2025, Tata Communications reported a net debt of ₹9,377 crore. The company also increased its workforce, adding 136 employees between December 31, 2024, and March 31, 2025.

Persistent Systems

Persistent Systems delivered a robust financial performance in Q4FY25, with significant revenue growth, improved margins, and key deal wins across industries.

Financial Performance – Solid Growth Trajectory

• Revenue: ₹3,242.1 crore, reflecting a 25.2% YoY increase, highlighting strong client demand.
• EBIT: Jumped by 35%, demonstrating efficient cost management and operational excellence.
• PAT: Grew by 25.5% YoY, reinforcing stable earnings growth.

Margins & Profitability Expansion

• EBIT Margin: Improved by 113 basis points, showcasing operating efficiency gains.
• Net Margin: Rose by 3 basis points, reflecting steady profitability.

Strategic Deal Wins – Expanding Industry Footprint

Persistent Systems secured new deals worth TCV $329 million and ACV $198.1 million, reinforcing its strong positioning in multiple sectors. Notable contracts include:

• Cybersecurity: Enhancing product compliance and monitoring for a global security service edge leader and a leading cybersecurity firm.
• Financial Services: Supporting regulatory compliance platform development for a U.S.-based financial services provider and AI-driven analytics for a global tax and accounting software leader.
• Healthcare & R&D: Modernizing data infrastructure on Azure for a major healthcare firm, and product engineering for a clinical research intelligence provider.
• Payments & IT Services: Partnering with a UK-based payments solutions provider for platform modernization, and managing IT infrastructure for a global contract R&D organization.

Revenue Distribution & Client Base

• Banking, Financial Services & Insurance (BFSI) Vertical: Contributed 32.3% to the total revenue.
• Geographic Breakdown: North America accounted for 80.5% of overall revenue, reaffirming its key market strength.
• Active Clients: 371 as of March 31, 2025, reflecting a decline of 11 YoY, though the company secured a new $75M+ client, strengthening its high-value portfolio.

Workforce Expansion & Operational Metrics

• Employee Additions: 653 new hires, supporting business scalability.
• Onsite Workforce: Slight decline QoQ from 15.1% to 14.8%, signaling increased offshore operations.
• Utilization Rate: Reached 88.1%, the highest in five quarters, showcasing efficient workforce management.
• Attrition Rate: Increased slightly, from 12.6% to 12.9% QoQ, reflecting moderate employee turnover.

Also read: We have also published a report on the performance of banks in Q4FY25.

Also read: We have published analysis of a few listed companies such as Narayana Hrudayalaya, Apollo Hospitals, and Balkrishna Industries. We have also published a detailed report on the Healthcare System in India.

References

• TCS quarterly result for Q4FY25 – Press Release
• Infosys factsheet for Q4FY25
• Wipro quarterly results for Q4FY25 – Press Release
• HCL Technologies investor release for Q4FY25
• Tech Mahindra results for Q4FY25 – Press Release
• Tata Elxsi investor presentation for Q4FY25
• Oracle Financial Services Software – Press Release
• Persistent Systems factsheet for Q4FY25
• Tata Technologies investor presentation for Q4FY25
• LTIMindtree investor presentation for Q4FY25
• Mphasis investor presentation for Q4FY25
• Zensar Technologies investor presentation for Q4FY25
• Sasken Technologies investor presentation for Q4FY25