The first results of the second quarter reinforce the hopes of a solid recovery; retailers, banks report nascent consumer recovery
The readings, from the earnings statements, suggest that the economy was certainly getting back on track in the three months leading up to September, although not all businesses were back to pre-pandemic levels.
At HDFC Bank, for example, disbursements and collections have been better. Once again, Avenue Supermarts’ own-source revenue increased by nearly 50% year-on-year, thanks to better attendance after the second wave; increases were better even compared to the same period in 2020. The retailer’s gross profit margins increased 40 basis points year-on-year while EBITDA margins increased 240 basis points year-on-year. Computer gamers, who make up a huge proportion of early risers, performed well.
Infosys posted excellent overall growth with stable margins and improved customer metrics. TCS’s margins were stable and analysts believe the company is well positioned to face any headwinds.
It is the beginning and the rise in the prices of raw materials would have affected the operating margins of user companies while increasing the income of producers. Automakers have reportedly suffered from the chip shortage, as volume data shows.
IT players are in a difficult situation as attrition levels have increased sharply, from 10 to 20% to 20 to 30%. At TCS, the attrition rate rose to 11.9% in T2FY22 against 8.6% in the previous quarter while for Infosys it reached 20.1% against 13.9% in Q1 and for Wipro 20.5% .
To cope with the shortage, they plan to recruit graduates in large numbers; TCS proposes to hire 35,000 new graduates at S2FY22 bringing the total for the year to 78,000.
TCS has integrated some 43,000 graduates in the past six months.
Pravin Rao, chief operating officer of Infosys, said the company intends to expand its plan to hire college graduates to 45,000 for the year; the company had already offered to recruit 35,000 graduates.