News Column

Western clients boost TCS profit

July 18, 2014

TATA Consultancy Services (TCS), the country's largest software exporter, posted 45-per cent jump in the June quarter net profit at ` 5,568 crore year-onyear helped by large outsourcing deals from Western clients, a broad-based revenue growth and onetime impact from a change in depreciation computation.

The Mumbaiheadquartered company had posted net profit of ` 3,840 crore under the IGAAP system of accounting for the corresponding period last year.

TCS, which counts Cisco and Hewlett-Packard among its customers, has increased profits at a faster pace than rivals Infosys and Wipro, which have both had internal management changes over the last two years.

Consolidated net profit for the three months to June 30, its financial first quarter, rose to ` 5,058 ($ 840.5 million) from ` 3,987 a year ago, TCS said on Thursday.

That compares with analyst estimates of ` 4,886, according to Thomson Reuters data. Revenue rose 22.9 per cent to ` 22,100.

"It has been a very well-rounded, broadbased growth across the board," chief executive and managing director N. Chandrasekaran told reporters after announcing the results.

On the outlook front, he said that the scenario is panning out as per its expectation. He maintained that performance in FY15 will be better than FY2013-14.

The Tata Group company faced headwinds in the Middle East and Africa market while among the segments, all except insurance, where it faced some trouble, performed well, Chandrasekaran said. He added that while the dip in business from the insurance vertical is nothing to worry about, the company does not expect it the deliver high growth. The inclusion of India among the highgrowth markets was a surprise and Chandrasekaran tempered expectations saying he does not expect domestic revenues to rise so well. "From a India point of view, we are still cautious. I wouldn't say that we will start to see high growth" he said.

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Source: Mail Today (India)

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