Tata Consultancy Services, India’s biggest software services exporter, posted a 26.9 per cent increase in quarterly net profit, as it won large outsourcing deals from Western clients in sectors including retail and life sciences.
TCS, which counts Cisco and Hewlett-Packard among its customers, has increased profits at a faster pace than rivals Infosys Ltd and Wipro Ltd, which have both had internal management changes over the last two years.
In that period, TCS has bet on higher IT spending by clients in the financial services, retail and life sciences sectors to boost growth as the global and US economies recover.
Consolidated net profit for the three months to June 30, its financial first quarter, rose to Rs 5,058 crore ($840.5 million) from Rs 3,987 crore a year ago, the Mumbai-based company said on Thursday. Revenue rose 22.9 per cent to Rs 22,111 crore. Commenting on the performance, TCS CEO and managing director N Chandrasekaran said robust volumes and healthy growth across all industries and key markets helped TCS start the new fiscal on a strong note.
“We have a strong demand pipeline in place and our customer centric mindset, leadership in the digital space and strong execution capabilities will help us sustain our momentum,” he added. The company announced a special dividend of Rs 40 per share on the 10th anniversary of its IPO.
TCS, which gets more than three-quarters of its revenue from the United States and Europe, said business volume grew 5.7 per cent, led by a growth in North America, Europe, India and Asia-Pacific region. “Our disciplined stance in operations helped us mitigate the impact of multiple headwinds like currency movements, accelerated depreciation norms and wage hikes during the quarter,” said TCS CFORajesh Gopinathan.