A muted Q1 for top Indian IT service firms; FrontRow shuts down
The first quarter is traditionally the strongest one of India's IT service companies. This year, however, macroeconomic headwinds have led to muted growth prospects.
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has delayed salary payouts for senior-level employees for June, citing cash flow issues. The company has close to 1,000 employees on its payroll.
As per sources, employees at the Reliance Retail-backed startup were paid a maximum of only Rs 75,000, with the promise of paying out the balance post-July 15 for those drawing a higher monthly salary.
According to reports, Dunzo is likely to resort to a second round of layoffs this month after it let go of nearly 300 employees—30% of its strength—earlier this year.
In other news, Taiwan's Foxconn has withdrawn from a $19.5 billion semiconductor joint venture with metals-to-oil conglomerate Vedanta, in a setback to the government’s chipmaking plans.
"Foxconn has determined it will not move forward on the joint venture with Vedanta," a Foxconn statement said without elaborating on the reasons. The world's largest contract electronics maker and Vedanta signed a pact last year to set up semiconductor and display production plants in Gujarat.
Meanwhile, Meta’s Threads surpassed 100 million users in just five days. Instagram’s text-based app’s growth is noteworthy given that it hasn’t even launched in the EU yet because of data privacy reasons.
ICYMI: We have found the largest known "mirror" in our universe!
European Space Agency’s (ESA) exoplanet mission Cheops discovered an ultra-hot exoplanet, covered by reflective clouds of metal and orbits its host star in less than a day, making it the shiniest exoplanet ever found.
In today’s newsletter, we will talk about
- A muted Q1 for top Indian IT service firms
- Hobby learning startup FrontRow shuts down
- Making healthcare accessible to LGBTQ community
Here’s your trivia for today: What is the most stolen food in the world?
Technology
A muted Q1 for top Indian IT firms
The three-month period between April and June is traditionally considered a strong quarter for the Indian IT services industry. However, top players in the industry—TCS, Infosys, Wipro, and HCLTech—are expected to see muted revenue growth for the first quarter of FY24 due to the challenging macroeconomic environment in the US and Europe.
Headwinds:
- The Indian IT services industry gets close to 80% of its revenue from the North American and European markets.
- In its preview note, Brokerage house Kotak Institutional Equities attributed IT companies’ modest growth to muted discretionary spending environment combined with the pullback of projects in financial services and telecom.
- Indian IT services companies could record lower net profit for the first quarter. “We expect our Tier-I IT coverage universe to post a PAT decline of 2.3% QoQ, while it should grow 15.3% YoY,” Motilal Oswal said.
Startup
Hobby learning startup FrontRow shuts down
Hobby learning startup has officially ceased its operations due to difficulties in finding a viable market for its product. The startup had already reduced its workforce by nearly 90%.
“We made the decision about two weeks ago. The process of shutting down operations takes time, and we were in the midst of determining the best approach,” FrontRow Co-founder Ishaan Preet Singh told YourStory.
The end:
- Since November, a team of about 35 members had been working on multiple experiments in the non-academic learning space with the goal of finding product-market fit.
- Founded in 2020 by Singh, Mikhil Raj, and Shubhadit Sharma, FrontRow has secured a total funding of $18 million across three rounds.
- Investors in the company include Peak XV Partners (Sequoia Capital), Lightspeed Venture Partners, Eight Roads Ventures, and Elevation Capital.
Inspiration
Making healthcare accessible to LGBTQ community
LGBTQIA+ Rights
The Indian healthcare system is rife with medical illiteracy, homophobia, and malpractice in queer health. This is despite the National Medical Commission banning conversion therapy in September 2022. It also asked for psychiatry and forensic medicine to become inclusive to the LGBTQIA+ community.
Now, a few allies and community members are working hard to bring a change.
Key takeaways:
- In 2021, the American Heart Association revealed transgender and gender-diverse adults are likely to have high rates of heart disease, and linked this to the stress that comes from discrimination and transphobia.
- SAATHII, along with community partners, has been educating and sensitising private and public hospitals across India about gender identity and that it can be different from the sex assigned at birth.
- In 2018, Mumbai-based oncologist Dr Prasad Raj Dandekar founded Health Professionals for Queer Indians (HPQI), an organisation that trains healthcare providers to the needs of the community.
News & updates
- Engines: Godrej Aerospace said it will pitch to manufacture modules of GE 414 engines and become part of the supply chain to manufacture engines that will power the country's next-generation indigenous fighter jets. It is also expecting $12.10 million in revenue from the civil aviation business in its current financial year.
- Economy: India is poised to become the world’s second-largest economy by 2075, leapfrogging not just Japan and Germany, but the US too, says Goldman Sachs. On top of a burgeoning population, driving the forecast is India’s progress in innovation and technology, higher capital investment, and rising worker productivity.
- Interest: Go Airlines (India) Ltd has invited investor interest in the company through a court-appointed administrator as part of the carrier's ongoing insolvency. Bankers aware of the developments told Reuters they expect Wadia Group—which used to own Go Airlines before it started bankruptcy proceedings—to be part of its insolvency process.
What is the most stolen food in the world?
Answer: Cheese. In 2011, the Center for Retail Research in Britain found that an astonishing 4% of the world’s cheese ends up stolen—high enough to have it pegged as a “high-risk” food for retailers.
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