TCS Q1 up 37% at Rs 3,318 cr,beats forecasts

Tata Consultancy Services,India’s largest IT company,exceeded expectations by posting a 37.4 per cent jump in quarterly net profit to Rs 3,318 crore for the June quarter

Written by ENS Economic Bureau | Mumbai | Published: July 13, 2012 1:06 am

Tata Consultancy Services,India’s largest IT company,on Thursday exceeded expectations by posting a 37.4 per cent jump in quarterly net profit to Rs 3,318 crore for the June quarter.

The TCS management has maintained its optimistic outlook despite the uncertain macro scene,reflecting good visibility from large accounts and also better execution.

The company’s revenues were at Rs 14,869 crore,up 37.7 per cent (year-on-year) and 12.1 per cent (quarter-on-quarter). The net profit showed a quarter-on-quarter rise of 14.6 per cent,the company said.

TCS MD and CEO N Chandrasekaran said,“We have seen strong,secular growth across all our service lines and industry segments driven by robust volumes from key markets like North America,Europe and UK. We have also absorbed impact of wage hikes and maintained our profitability in a volatile setting.”

While Infosys lost a big client,TCS signed a $100 million plus contract with a leading North American retailer as its transformation partner.

“Looking ahead,TCS continues to see good demand from global corporations as they successfully navigate an increasingly complex environment. Our investments in new technologies and platforms are bearing fruit with increasing market traction and we are confident of playing a pivotal role in our customers’ future business evolution,” he said.

S Mahalingam,CFO and executive director,said,“Our ability to monitor and maintain our operating expenses to support higher revenues is helping us maintain healthy margins.”

Strong volumes drive TCS

* Dollar revenues above expectations

* The volume growth was 5.3%,higher than that reported by Infosys

* TCS maintained optimistic outlook despite the uncertain macro scene

* Gained big clients and added more employees

WEAK POINTS

* Average realisations moderated by about 1.3%,indicating some pressure from clients and mix change

* EBIT margins came in marginally lower than what analysts expected

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