Aided by steady growth in orders and gains from a weakening rupee, India's top software exporter Tata Consultancy Service on Thursday reported an industry-leading 15.5% year-on-year growth in net profit at Rs 3,831 crore and 21% in revenue at Rs 17,987 crore in April-June.
The company, which beat analyst forecasts, said it would outpace the industry average in growth and set the tone for a healthy outlook in IT sector.
With this strong performance, TCS has further widened the gap with its nearest rival Infosys. The Bangalore-based company last week announced 3.7% growth in profit at Rs 2,374 crore and 17% growth in revenues at Rs 11,267 crore. TCS revenues grew 9.5% sequentially compared with Infosys that grew by 2.7%. Analysts said core profit margin before interest and tax was 3.4 percentage points higher than that of Infosys.
In the quarter, TCS closed 10 large deals and added two new clients that involved more $100 million in revenues. The company maintained its gross hiring target of 45,000 employees in financial year 2013-14.
“Our order book is very solid. We continuously see increase in large deals, especially in the US. Our investment in Europe also is gaining traction,” said N Chandarasekharan, managing director and CEO, TCS.
He maintained that the company will grow faster than the 12-14% Nasscom forecast for the IT industry for 2013-14. However, he said that the growth momentum may vary in the coming quarters.
“We already said that this year is going to be a normal year. In a normal year, the first two quarters will be better than the next two quarters,” he said.
“Healthy set of results by TCS shrug off any concerns regarding health of the Indian IT industry which were raised due to weak performance by global players like Accenture and Oracle,” said Ankita Somani, research analyst, Angel Broking.