TWILTCH providers must focus on resilience building, not just cost-savings

TWILTCH (TCS, Wipro, Infosys, LTIMindtree, Tech Mahindra, Cognizant, and HCLTech) are India’s leading heritage IT and business service providers—which is why we use their financial results as an indicator for market-wide performance. If we look at Exhibit 1, we can see continued improvement for the services industry as average growth rates rise to 3.4% year-on-year (YoY) in Q4 2024, as compared to the 0.1% YoY decline in Q4 2023. It’s a definite improvement—but the industry has not yet returned to the pre-pandemic highs.

Exhibit 1: Year-over-year ‘TWILTCH’ revenue growth in Q4 2024

*Note: Revenue and growth data represents HFS estimates based on analysis of publicly available information. Year-on-year (YOY) growth compares a quarter with the same quarter of the previous year.
Source: HFS Research and earnings reports of leading service providers, 2025

Uncertainty continues, but there are green shoots in North America that a slowing Europe offsets

Uncertainty continues to impact enterprises’ discretionary spending, and we don’t expect this to change in the short term. Macroeconomic uncertainty looks set to continue with ongoing tariff and trade wars causing widespread disruption across the global economy. However, given that this raft of earnings covers October to December 2024, they predate the latest tariffs.

Looking broadly across the earnings of the TWILTCH providers, we see promising signs in North America, as strong performance from the retail, banking, financial services, and insurance industries has driven growth for these providers. In contrast, Europe’s economic environment is causing ripple effects through industries already battling supply chain disruptions such as the automotive and manufacturing sectors.

As we move further into 2025, it will be interesting to see how these challenges are impacted by ongoing global economic challenges.

Delving into the earnings announcements from the TWILTCH providers

• TCS reported a 3.5% YoY revenue growth in Q4 2024. The increase was driven by its Regional Markets and India organizations. TCS’ India business was boosted by a large transformation deal with BSNL and a handful of government projects. At the same time, the Regional Markets performance was driven by the Middle Eastern governments’ investment in digital initiatives. TCS reported a slowdown in its healthcare and life sciences, communications, and media businesses, as well as in the European and American regions.
• Wipro reported a 1.0% YoY revenue decline, marking almost two years since its last quarter of growth in Q2 2023. While its healthcare and BFSI businesses showed strength this quarter, Wipro’s overall performance was impacted by slowing demand in its energy and utilities, manufacturing, technology, and communications industries in the European and APMEA regions.
• Infosys reported a 5.9% YoY revenue growth, led by strong performance in its BFSI, retail, manufacturing, and engineering sectors. However, hi-tech, communications, and the European automotive businesses slowed as organizations reportedly prioritized cost optimization over new projects.
• LTIMindtree reported a 5.1% YoY revenue growth, primarily driven by strong performances in BFSI and manufacturing, though it faced slowdowns in its tech, media, and communications businesses. Notably, LTIMindtree experienced a decline in Europe, attributed to a slowdown in discretionary spending and revenue cannibalization due to AI-efficiency gains impacting profit margins.
• Tech Mahindra reported a 0.3% YoY revenue decline this quarter. This was driven by weakness in its telecom and manufacturing industries. However, it was balanced by healthy growth in its BFSI and healthcare businesses. Leadership indicates that this was the result of core banking, payments, and insurance deals.
• Cognizant reported 6.8% YoY revenue growth—the highest of its TWILTCH peers this quarter. The growth was driven by large wins in financial services, healthcare, and digital engineering alongside the inorganic growth from its Belcan and Thirdera acquisitions. Its fastest-growing region was North America. However, Cognizant reported slower growth in Europe and the rest of the world, thanks particularly to cautious enterprise spending.
• HCLTech reported a 3.5% YoY revenue growth this quarter, driven by its telecoms, media, and publications vertical, which experienced a 31% YoY growth. This surge was largely driven by the $2.1 billion Verizon deal. HCLTech’s retail and CPG, technology, and services businesses had a strong quarter, while its manufacturing and telecom verticals posted slow growth.

The Bottom Line: TWILTCH providers must help enterprises pivot from simple cost-cutting to resilience building.

Economic uncertainty appears to be the new normal, and cost optimization will only help enterprises so much. Instead, enterprises should push their service provider partners to deliver resilience. This means moving beyond traditional labor arbitrage models to technology arbitrage, leveraging tools such as automation and AI to provide long-term agility, adaptability, security and compliance, and value.