Tata Consultancy Services Ltd (TCS), India's largest software exporter, said net profit in the three months ended 31 December rose 26.7% from a year earlier, beating analysts' expectations in a seasonally-weak quarter.
The company reported a net profit of Rs.3,550 crore in the December quarter. Revenue gained 21.7% to Rs.16,070 crore.
Net profit and revenue increased 3.4% and 2.9% sequentially in rupee terms, while operating margin widened 56 basis points (bps) to 27.3%. One basis point in one-hundredth of a percentage point.
Analysts had expected TCS to post a dollar revenue growth of 3.1% from the preceding quarter and estimated a margin decline of 20 bps, quarter on quarter. Volume growth was pegged to be 2-3% sequentially for big information technology companies, with TCS leading the pack.
On Friday, Infosys Ltd's earnings had beat analyst expectations that predicted the firm will see December quarter profit decline by as much as 6%, and lower revenue growth forecast for the year ending March by 1-2%.
Infosys reported a net profit of Rs.2,369 crore for the December quarter. This was the first positive news from Infosys since June last year when it stopped its quarterly revenue forecasts. Industry lobby group Nasscom has projected that Indian IT companies will grow 11-14% in the year to 31 March.
TCS gained 2.14% to Rs.1334.3 on Monday on BSE while the benchmark Sensex gained 1.23% to 19,906.41 points and the IT index gained 2.57% to 6,413.25 points. TCS's earnings were declared after the end of trading in Mumbai.
Infosys gained 3.49% to Rs.2,807.25. Wipro Ltd lost 0.38% to Rs.417.9 but HCL Technologies Ltd gained 4.16% to Rs.671.80.
TCS has gained 6.02%, BSE's IT index has risen 12.83% and Sensex has advanced 2.47% this year. From the beginning of the year, Infosys has gained 21.08%. Almost all the gain was registered after its results on 11 January beat expectations. Wipro has advanced 5.97% and HCL Tech rose 8.49%.
The October-December quarter is typically a seasonally-weak period for IT companies because of holidays in the US and Europe for Christmas and New Year. The US and the UK are the main markets for Indian IT companies, accounting for more than 85% of the revenue.
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