Software majors mark robust performance in Q2

By agencies   |   Tuesday, 25 October 2005, 07:00 Hrs
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CHENNAI: The software companies have shown robust performance on the revenue and earnings front for the second quarter of current financial year.

For the four software majors on quarter-to-quarter basis the growth of revenues and profit interest and tax has been strong across the board. Satyam's PBIT growth at 17.4 percent on a revenue growth compared to 9.1 percent.

Though QoQ is a key benchmark to analyse the performance of software companies, the year-on-year growth is also assuming importance. For Wipro, while the revenues of its global IT services and products division has grown by 26 percent, its PBIT has moved up by only 11.9 percent. This has shows the pressure on their PBIT margins, which declined to 24 percent from 28 percent on a year-on-year basis.

The sharp increase in the contribution from clients - lying between numbers five and ten in the top client list, has marked an increase in the growth of all the four software majors. The top client of Tata Consultancy Services grew by 26.4 percent on a sequential basis, even as the top client of Infosys and Satyam each recorded negative growth. The client additions at 74 were the strongest in the case of TCS, while it was encouraging for all the majors. The client pipeline in different brackets- $1, $ 5 and $10 million - shows the potential for growth along this chain.

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