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Tata Consultancy profit rises 22 per cent to Rs 35.97 billion

Reuters
Apr 17, 2013 at 06:27pm IST

Mumbai: Tata Consultancy Services Ltd, India's top software services provider, matched estimates with a 22 per cent rise in quarterly profit and said it expects to grow revenue faster than a key industry-wide forecast for the year starting this month.

Net profit for the fiscal fourth quarter ended March 31 rose to 35.97 billion rupees from 29.46 billion rupees in the year-earlier period, as it won orders from customers including Nokia and BNP Paribas.

That was roughly in line with an average earnings estimate of 36.2 billion rupees among 20 analysts polled by Reuters. It also said it expects revenue in the current fiscal year to grow in excess of the National Association of Software and Services Companies (Nasscom) forecast of 12-14 per cent export growth for the sector, in constant currency terms.

Tata Consultancy profit rises 22 pc to Rs 35.97 billion

TCS said Net profit for the fiscal fourth quarter ended March 31 rose to Rs 35.97 billion from Rs 29.46 billion in the year-earlier period.

By comparison, No 2 player Infosys Ltd on Friday forecast dollar revenue growth of 6-10 per cent for the new fiscal year, which was lower-than-expected, disappointing investors and sending its shares down 21 per cent.

Infosys has struggled to implement a strategy of generating a higher proportion of revenue from its own software platforms, and its market share has been essentially flat for the past two years. By contrast, TCS has focused on more traditional outsourcing services.

TCS grew its business volume by 4.4 per cent from the previous quarter, compared with 1.8 per cent growth at Infosys. During the March quarter, TCS' operating margins fell to 26.5 per cent from 27.3 per cent in the previous quarter and 27.7 per cent in the same quarter a year earlier.

The company said it added 52 new clients in the quarter and that the pipeline of large potential deals has grown. "We have endeavoured to maintain our profitability despite stiff headwinds and increased volatility through the year," Rajesh Gopinathan, chief financial officer, said in the earnings statement, released after the close of markets in India.

Sector investors have been rattled by Infosys' guidance, pending US legislation that would make it more expensive to send workers there on temporary visas, and a rising rupee fuelled by the global slump in commodities, which pushes down overseas revenue in local currency terms.

The BSE IT services index fell 1.14 per cent on Wednesday ahead of the TCS results, underperforming the broader market, which was down 0.07 per cent. Earlier on Wednesday, fourth-ranked HCL Technologies Ltd said its March quarter profit rose 73 per cent, beating estimates, although its shares ended 1.5 per cent lower after an early jump.

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