Tata Consultancy Services (TCS), the country’s largest software exporter, on Tuesday reported an 18.2% year-on-year rise in net profit to Rs 2,803 crore in the October-December third quarter, in line with analyst estimates and signaling optimism in an industry after a disappointing outlook from No 2 player Infosys last week.
Aided by a depreciating rupee that boosted its dollar earnings, TCS saw its revenues rise 36.6% to Rs 13,204 crore from the year-ago quarter. It, however, suffered a Rs 300-crore foreign exchange loss during the quarter on account of its hedging of the rupee at R49, which resulted in market losses. The rupee on Tuesday ended the day at Rs 50.73 to a dollar.
“We have grown in all markets and across all industries… We are happy to have seen secular growth. The pipeline looks healthy and despite the macro economic factors, we have been winning and closing deals on the ground,” said TCS chief executive officer N Chandrasekaran. “But we need to watch the situation closely.”
TCS sees prices stable in 2012, expecting neither a decline or surge for the services it provides.
TCS’s business growth was led by European markets where it grew 18.1% sequentially, followed by US (13.3%) and the UK (9.5%).
Partha Iyengar, vice-president at industry analyst Gartner said both TCS, and HCL, which reported solid numbers on Tuesday, signaled strength for the outsourcing-based IT industry.
“The year 2012 will see a widening of the gap between companies with a ‘can do’ and ‘cannot do’ style of management in the offshore space, and will likely see a new order emerge,” Iyengar said.
The company added 40 new clients in the third quarter and 11,981 employees.
Last week, Infosys Technologies beat market expectations with a 33% jump in quarterly profit but trimmed its forecast for full-year revenue outlook due to the euro zone crisis, which led to IT stocks falling 5.9% last Thursday.
TCS shares, which had dropped 4% last Thursday, fell marginally by 0.28% on Tuesday to Rs 1,104 on the Bombay Stock Exchange ahead of the results announcement.