Here’s another motion chart mapping the performance of Indian IT Services providers. Data is from FY08 – FY12. Barring Cognizant, all companies listed on NSE/BSE. PLay around with the chart to see performance on different metrics.
Also refer my post on "Interactive R&D Spend Analysis".
Also refer my post on "Interactive R&D Spend Analysis".
Few Observations
- TCS (nearly $10B), Wipro($7.5B), Infosys($6.7) and Cognizant (2012 results awaited) clearly emerge as market leaders. HCL Tech is significantly behind with $4.1B. Rest of the pack is way behind in <$1B club.
- TCS puts up a stunning performance managing 11.3% topline CAGR and 14.1% bottomline CAGR since 2008. It is commendable for a company of its size.
- Cognizant posts an unmatched revenue growth and operating profit growth of 32% and 22% respectively. (since 2008). It has emerged as one of the market leaders.
- Infosys and TCS continue to impress with unmatched consistent operating margins of over 30% . Only Persistent comes close with around 22%. Rest belong to the sub 20% class.
- TCS, Cognizant and Mindtree were the top 3 companies with the highest employee growth rate (CAGR) of 17%, 16.5% and 14.3% respectively.
- Wipro and HCL Technologies have the highest cost per employee as of FY12 of $44K and $40K respectively.
Few Inferences
1. Cognizant seems to have got its execute ion perfect. It aligned employee growth, revenue growth and growth in employee strength for maximum business impact.
2. TCS performance indicates that their operational & market strategy too is driving towards sustainable growth and profitability. They have one of the lowest per employee costs @ $29K.
3. Infosys still seems to be in some state of consolidation. It has posted a flat 10% CAGR across revenues, profits and employee strength. We’ll have to wait and watch the kind of fruit current CEO’s “Infosys 3.0” strategy, bears.
4. Amongst the smaller players, Persistent seems to be positioning itself for larger things. It has posted CAGR of 13.5% and 14% for revenues and profits. It has one of the lowest costs/employee @ $23K and the only player have operating margins of more than 20% , except Infosys and TCS. I think this would be an interesting stock to follow.
Please share your comments, observations & inferences.
