2 years, 8 months ago

Q1 results of HCL and TCS have some worrying similarities

HCL Technologies Ltd. reported its June quarter earnings on Tuesday, post market hours. First and foremost, HCL's Ebit margin at 17% declined 100 basis points sequentially, and was at a multi-quarter low. HCL's last twelve months IT Services attrition increased to 23.8%, up 190 bps quarter-on-quarter. Higher sub-contracting costs, increased attrition and travel costs making a comeback were factors that hurt Ebit margins of HCL and TCS. Also, both HCL and TCS have hired lower number of employees in the June quarter compared to the recent quarters.

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