TCS expected to report 12.4% profit growth in Q3; Delhivery clears allotment of 1.7 lakh shares for Esops

Also in this letter:
■ Delhivery approves allotment of 1.7 lakh shares against exercised Esops
■ Paytm Payments Bank appoints Surinder Chawla as MD & CEO
■ Women gamers break glass ceiling but continue to face hurdles

TCS Q3 preview: expect margin improvement, analysts say

Tata Consultancy Services (TCS) is expected to report 12.4% growth in profit and 16.7% growth in revenue for the third quarter on Monday, according to an ET poll of analysts.

Margin improvement: In a quarter of higher furloughs (holidays), India’s largest IT services company by revenue is expected to report a margin improvement of 40 basis points sequentially to about 24.4%, led by higher efficiency, lower attrition and rupee depreciation.

“This quarter is expected to be hit by furloughs, (which will be) higher than the last couple of years. However, margins are expected to improve QoQ due to easing of supply side pressure,” ICICI Securities said in a report.

TCS chief executive Rajesh Gopinathan told ET last month that calendar year 2023 would be “the year to repair margins.” He said they would improve in the coming quarters – but not by leaps and bounds – as the US economy was in good shape.

Zoom out: Indian IT companies overall are expected to report modest numbers for the quarter ended December 31, on tightening tech spending by clients due to macroeconomic and geopolitical concerns.

The third quarter is seasonally weak for IT firms as it has fewer working days.

ICRA said in a recent research report that since the Indian IT services industry generates close to 60-65% of its revenue from the US market and 20-25% from Europe, it remains susceptible to macroeconomic uncertainties and adverse regulatory changes in these key operating markets.

Delhivery approves allotment of 1.7 lakh shares against exercised Esops

Delhivery said in a regulatory filing on Friday that its stakeholder relationship committee has approved the allotment of 1,70,676 shares against the exercise of vested employee stock options granted under the company’s employee stock options pool (Esop) plans of 2012 and 2020.

Catch up quick: Last month, the logistics company had approved the grant of 46,219 Esops under the Delhivery Employees Stock Option Plan 2012. It also approved and allotted 12,55,568 equity shares with a face value of Re 1 each in the same month. Of these, 6,82,168 were under its 2012 Esops plan and the remaining 5,73,400 under its 2020 Esops plan.

By the numbers: The company has projected a cost of Rs 566 crore on Esops that are already granted over the next five years. Of this, Rs 282 crore is the projected cost for the ongoing fiscal year.

As of September 30, the company had 34.65 million Esops, of which 30.24 were unvested. In addition, it has 43.45 million ungranted Esops, representing almost 5.4% of its shareholding.

During the company’s September-quarter earnings call in November, Delhivery’s chief financial officer Amit Agarwal had said that a significant majority of the 43.45 million shares would vest only if the company’s stock price reaches Rs 800, Rs 1,000 and Rs 1,200. On Friday, the company’s stock ended trading at Rs 320.70 apiece.

Also Read: ETtech Explainer | What are Esops and what do they mean for employees and employers?

Paytm Payments Bank appoints Surinder Chawla as MD & CEO

Paytm Payments Bank has appointed Surinder Chawla as managing director and CEO, Paytm’s parent entity One 97 Communications said in a regulatory filing on Sunday. He replaces Deependra Singh Rathore, who was made interim CEO after Satish Kumar Gupta retired in October 2022.

Chawla joins from RBL Bank, where – as head of branch banking – he focused on expanding its current account, savings account (CASA) base, fee revenue and cross-selling across channels.

Quote Unquote: “As we continue on our journey to provide accessible, convenient banking options to all of our customers with the highest standards of compliance and operational excellence, I am excited to contribute to our shared mission of driving large-scale financial inclusion”, Chawla said in a statement.

Meanwhile: Proxy advisory firm Institutional Investor Advisory Services (IiAS) has written to SEBI, seeking the intervention of the regulator in Paytm granting employee stock options (Esops) to its founder and CEO Vijay Shekhar Sharma.

TWEET OF THE DAY

Women gamers break glass ceiling but continue to face hurdles

In the past few years, the number of women who have taken to online gaming has gone up considerably, and they now comprise about half of all gamers in the country.

Equal split: As per a recent study by gaming focused venture fund Lumikai, the male-female gamers’ ratio of 60:40 is equally split between metros and non-metro cities.

Another study by PC maker HP has found that more women than men consider gaming a full-time career option in India.

Cyber-bullying: Payal Dhare, aka Payal Gaming on her Instagram and YouTube page, spends about five hours playing and streaming games online. Her team of moderators, on average, end up blocking about 1,000 chat messages daily, and reporting 100-200 accounts.

“People do get a bit judgemental when they see a woman playing games online,” especially if it is a multi-player game like PUBG: Battlegrounds or its Indian variant BGMI, she said.

India’s contribution to SAP cloud revenues in APAC doubled in two years: executive

India’s contribution to SAP’s cloud revenues in the Asia Pacific Japan region doubled in the last two years, a senior SAP executive told ET, as the country remains the top market in the region for the German technology company.

The number of cloud customers doubled in India in the last two years as the company witnessed rapid growth in the mid-market and enterprise segments, said Kulmeet Bawa, managing director and president, India subcontinent for SAP.

Quote unquote: “There’s the incumbency piece where existing customers are moving their digital core and ERP systems to the cloud, and as we do that, they are also adding on new solutions as they move. In addition to that, India is one of the leading markets in the world, if not number one in terms of adding new customers”, Bawa said.

Why it matters: While there are concerns around the macroeconomic situation in Europe and North America, the mood is a bit different in India. Customers are cautious about the global environment, but they don’t see demand slowing down in India, Bawa said.

Other Top Stories By Our Reporters

Walt Disney’s BVVOD paid Rs 178.13 crore to acquire Hotstar’s US biz: Star India-controlled Novi Digital Entertainment, which operates the Disney+ Hotstar streaming platform, sold its US business to Buena Vista Video on Demand (BVVOD), a unit of Walt Disney, for Rs 178.13 crore. Disney+ Hotstar, which was called Hotstar in the US, exited the market in 2021. Walt Disney’s BVVOD is a leading distributor of movies in the video-on-demand arena.

Disney+ Hotstar parent recognises exceptional income of Rs 219.72 crore: Novi Digital Entertainment, the company that houses Disney+ Hotstar, has recognised an exceptional income of Rs 219.72 crore during the current year on account of the sale of its US business to Walt Disney-owned Buena Vista Video on Demand for Rs 178.13 crore and a writeback of deferred income of Rs 41.59 crore relating to Hotstar US subscribers.

Google moves Supreme Court against NCLAT order on CCI fine: Google on Saturday moved the Supreme Court against a ruling of the National Company Law Appellate Tribunal (NCLAT), which refused to stay a Rs 1,337.76 crore penalty imposed by the Competition Commission of India (CCI) for alleged anti-competitive practices.

Ather going public depends on ability to generate profits, says CEO: Electric vehicle maker Ather Energy won’t go public unless the company is either profitable, or close to profitability, chief executive Tarun Mehta said. “I want to launch an IPO when we are very close to profitability and I think it’s still a journey for us,” Mehta said on the sidelines of a consumer event in Bengaluru on Saturday.

Sleeping on the job is the latest perk at new-age companies: Overwhelmed with work, tired out and need a quick shut-eye? Employees at some new-age companies will now be allowed to snooze in the office and take some me-time as part of the workday.

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