LTI grew Q4 2020 revenue to $427.8M an increase of 8.5% YoY, operating margin (EBIT) remained strong at 20.6%. LTI weathering the COVID storm with positive growth in each quarter of 2020.
Mindtree Q4 2020 revenue was largely flat at $274.1M, a slight 0.4% decline. Operating margin (EBIT) again strong at 19.6%. Mindtree showing a distinct upturn in revenue growth from Q2 2020 (-4.2%) and Q3 2020 (-3.7%).
This week will be a very busy period for service players results with 5 providers posting results including IBM on Thursday – so expect a roundup of these results on Friday. See Table 1 at the bottom of this post for a complete calendar of the results to come.
As I mentioned in my first of the blogs this is a placeholder for the Q4 2020 data – so the charts here will change and get updated as more results come in. So apologies if the text doesn’t change that much here – the data is really telling the story and that is what is being updated.
Looking at the first chart we can see the results on a quarterly basis for all these firms – the top chart plotting year on year growth for the quarters and the bottom chart showing operating margin. You can see calendar Q4 2020 results have continued to show improvement and these companies navigate away from the COVID-19 related problems of Q2 and Q3. It’s encouraging that all of the firms have see sharp improvements in growth and have maintained robust margins.
Exhibit 1 – Digital IT Services quarterly results 2018 to 2020 for players with published Q4 2020 results
[iframe width=”750″ height=”900″ seamless frameborder=”0″ scrolling=”no” src=”https://public.tableau.com/views/EarlyBirdRev2/MarginvRevenueSoFar?:language=en-GB&:display_count=y&publish=yes&:origin=viz_share_link&:showVizHome=no&:embed=true”]
Source: Market Prescience Analysis of Company Financials. All quarters as a close to calendar quarter as possible.
Whilst you can see a strong curve back to growth for all of the players, the stellar Q3 and Q4 helping to get Infosys back on track – with growth in this quarter similar to rates pre-pandemic. LTI, HCL, Infosys and Accenture are part of what may be a fairly exclusive club for 2020 – Digital IT Services firms that have revenue growth overall for 2020.
The second chart shows the calendar year performance of these companies – with the total revenue and annual growth. This just combines the revenue from the four calendar year quarters.
Exhibit 2 – Digital IT Services annual results 2018 to 2020 for players with published Q4 2020 results
[iframe width=”640″ height=”720″ seamless frameborder=”0″ scrolling=”no” src=”https://public.tableau.com/views/EarlyBirdRev2/USDComparisonYTDEB?:language=en-GB&:display_count=y&publish=yes&:origin=viz_share_link&:showVizHome=no&:embed=true”]
Source: Market Prescience Analysis of Company Financials. All quarters as a close to calendar quarter as possible.
HCL, Accenture and Infosys have managed to grow revenues, and are likely to have grown market share during the year.
The third chart shows the results for each supplier in calendar Q4 2020 on a grid comparing operating margin against revenue growth.
Exhibit 3 – Digital IT Services quarterly results Q4 2020 (Calendar)
[iframe width=”600″ height=”600″ seamless frameborder=”0″ scrolling=”no” src=”https://public.tableau.com/views/EarlyBirdRev2/SupplierPerf?:language=en-GB&:display_count=y&publish=yes&:origin=viz_share_link&:showVizHome=no&:embed=true”]
Source: Market Prescience Analysis of Company Financials. All quarters as a close to calendar quarter as possible.
As you can see the performance from all seven players has been a marked improvement over Q2 and Q3 2020. Which further shows investment in digital platforms and business agility has been a priority not just in spite of the pandemic, but in some cases because of it.
Check back on Friday to see how the new results change the outlook – see the full calendar below.
Table 1 – Results Calendar for Q4 2020
|
Supplier |
Publication date quarterly results to Dec 2020 |
| IBM (Services) | 21st Jan |
| Mphasis | 21st Jan |
| Zensar | 21st Jan |
| Coforge | 21st Jan (est) |
| WNS | 21st Jan |
| CGI | 27th Jan |
| Fujitsu (Services) | 28th Jan |
| Persistent | 29th Jan |
| Tech Mahindra | 29th Jan |
| Cognizant | 3rd Feb |
| NTT Data | 3rd Feb |
| AWS | 4th Feb |
| Unisys | 4th Feb (est) |
| Genpact | 9th Feb |
| DXC | 11th Feb |
| Virtusa | 11th Feb (est) |
| Hexaware | 15th Feb (est) |
| Capgemini | 17th Feb |
| Tieto Evry | 17th Feb |
| Atos | 18th Feb |
| EPAM | 18th Feb |
| EXL | 20th Feb (est) |
| SopraSteria | 26th Feb |
| T-Systems | 26th Feb |
| Indra | 4th Mar |
Source: Company Websites
