Earnings season has started in the Indian stock market and the mood of the market seems to be decided with the Q3 results of the IT sector. Labor Codes have emerged as a new challenge for IT companies this quarter. Due to these rules, a total exceptional charge of more than ₹ 4,373 crore has been imposed on Infosys, TCS and HCL Tech. Infosys reported additional expenditure of ₹1,289 crore, TCS ₹2,128 crore and HCL Tech ₹956 crore. Due to the new labor code, the provisions of gratuity and leave liabilities have increased. About ₹1,800 crore was spent on gratuity adjustment in TCS alone. Its impact was visible on margins, where Infosys’ margin fell from 21% to 18.4%, while TCS remained at 25.2%. Rising costs have increased the concern of investors.
Impact of Labor Code on Infosys–TCS–HCL. Shock of ₹4,373 crore. Money Live | Impact of the Labor Code on Infosys, TCS, and HCL | A ₹4,373 crore setback
