It’s a wrap: News this week (July 20 – July 26)

There have been multiple developments this week on the tech front. From MeitY budgetary allocation to quarterly earnings, this is the list of the most important developments for a quick catch-up:

IT service firms’ Q1 earnings

This week leading IT firms such as Tech Mahindra, Mphasis, and Coforge announced their quarterly results. 

Tech Mahindra announced its first-quarter financial results for FY25 on Thursday. The company reported a 29% increase to ₹851.5 crore in the net profit for this period, while the profit margin grew by 110 basis points to 8.5%. The chief executive officer Mohit Joshi credited the growth in the profit margin to a three-year plan, Project Fortius. The revenue stood at ₹13,005 crore, down 1.2% on a yearly basis. Sectors like manufacturing, retail, and healthcare showed positive momentum. While the core communications vertical declined, a third of overall revenue came from this sector. 

Further, Mid-tier IT solutions company Mphasis reported a consolidated net profit of ₹404 crore for the June quarter, marking a 2.1% increase from the same period last year. Sequentially, net profit rose by 2.9%. Revenue from operations for Mphasis grew 4.6% year-on-year (YoY) to ₹3,422 crore, with a quarter-on-quarter increase of 0.2%. 

Lastly, Coforge announced its financial results for the quarter ended June 30, showing mixed performance. The company reported an 8.1% (YoY) revenue growth in Q1FY25, but profits declined by 19.42% compared to the same period last year. 
Compared to the previous quarter, Coforge experienced a 1.79% increase in revenue. However, profits saw a significant drop of 40.46%. The decline in profit is attributed to a one-time expense related to the stake acquisition of Cigniti Technologies, announced in May.

Accenture to invest in ANSR

Global capability centre (GCC) consulting firm ANSR has formed a strategic alliance with Accenture to design and set up global teams for technology and business functions. Under this partnership, Accenture has also made an equity investment in the company and in connection will join ANSR’s board of directors. While the quantum of investment has not been revealed by the firms, a report by the Times of India says that Accenture has invested $170 million. 
Budget outlay for MeitY grows 50%

The Union Budget 2024-25 announced today has allocated ₹21,936 crore to the Ministry of Electronics and Information Technology (MeitY). The allocation is 52% more than the revised estimate of FY24 which was ₹14,421 crore. This is also a 2.6% up from the interim budget allocation of ₹21,385.15 crore made in February. 

To be sure, the majority of the budget allocation increase is towards the production-linked incentive (PLI) scheme for semiconductors and large-scale electronics manufacturing and IT hardware. Further, the India AI Mission has been given a budgetary allocation of about ₹552 crore.

Infogain makes new acquisition

Infogain, a digital platform and software engineering services company headquartered in Silicon Valley, announced on Monday its acquisition of Impaqtive, a Salesforce consulting services firm based in New Jersey and a centre in Kochi.
With this acquisition, Infogain will increase its employee strength by 150, bringing the total number of employees to 6,000 plus. These employees will be located in Kochi and other Infogain offices in India, including Delhi, Mumbai, Bengaluru, and Pune.

Google-Wiz deal falls through

Google's parent Alphabet's purported $23 billion bid to acquire cybersecurity startup Wiz has reportedly fallen apart, as the latter turned down the proposal on Tuesday. What could have been the largest acquisition in the tech giant’s history, the rejection may now come as a blow to Alphabet, which is trying to catch up with Microsoft’s Azure and Amazon Web Services (AWS) in an intensely competitive cloud services market.