From Infosys to TCS: Are IT companies in a downturn? Is there a dangerous job? Zoho CEO Sridhar Vembu says…
Zoho CEO Sridhar Vembu said it was not the tariffs imposed by U.S. President Donald Trump, nor the sudden rise in artificial intelligence (AI) and the “cyclical downturn” of Indian IT services companies, but their own inefficiency.
This is in the Indian IT giants – Infosys, Tata Consulting Services and WIPRO – that reported disappointing revenues for the quarter, which were disappointing in their major markets, suggesting a potential hiring slowdown in the industry this year.
Vembu responded to news of the disappointing revenues of these companies, and his “operating paper” said: “What we’re seeing is not only a cyclical downturn, but not just AI. There is trouble even without the uncertainty caused by tariffs.”
Zoho CEO said the software industry is “very inefficient in both products and services.” “These inefficient efficiencies have accumulated over decades of long-term asset bubbles.”
Sadly, India has adopted many efficiencies, Vembu said.
“Our job depends on them. For example, the IT industry attracts people who may enter manufacturing or infrastructure (for example).
He stressed that India “only in the early stages of long estimates.” “My argument is that the past 30 years are not a good guide for the next 30 years. We are indeed at the inflection point.”
“We have to challenge our assumptions and think new,” he added.
Vembu said in March this year that the IT industry “absorbed all the oxygen” and left a “financial bubble” that can absorb resources and reduce our capabilities.
What is the Q4 earning signal for IT department?
The fourth quarter figures and growth outlook for the largest IT players suggest that the worst may not be lagging behind. Trump’s tariffs have intensified concerns about economic growth despite demand rising interest rates and rising inflation in the past few quarters.
Most experts believe the United States may see a recession and the trade war will greatly curb global economic growth.
The industry appears to be at a turning point as the industry falls into uncertainty with Trump’s tariffs, economic slowdowns, and uncertainty in artificial intelligence (AI).
Experts say that even if it may be much better than the previous fiscal year, the fiscal year 2025-2026 will be challenging.
TCS vs Infosys vs Wipro Q4 results
TC reported the slowest revenue growth in four years. ₹644.79 million ₹612.37 million were issued during the same period last fiscal year. Its after-tax consolidated profit (PAT) Q4FY25 has been reduced by 1.7% ₹Profit of 1222.4 million ₹Rs 12,434 crore was reported for the corresponding quarter of the previous fiscal year.
Infosys reports that consolidated net profit of Q4FY25 fell 11.75% year-on-year ₹70.33 million. The company rose 8% from operating revenue this quarter, reaching 2018 ₹409.25 million ₹The corresponding quarter of the previous fiscal year was 379.23 million.
Infosys expects revenue growth in FY26 in a constant currency manner, the weakest guidance since April 2009.
Wipro reports consolidated net profit growth 26% year-on-year ₹35.696 million. The combined revenue from operations for the quarter was almost flat ₹22,504.2 million.
