RPT-UPDATE 1-India's Tata Consultancy Q1 profit beats forecast
(Repeats story issued late on Thursday)
* Q1 profit 18.44 bln rupees vs 17.6 bln market consensus
* CEO says demand outlook very good, to hire 40,000 in FY11
* Shares end up 1.2 pct ahead of earnings in a weak market
(Adds details) MUMBAI, July 15 (Reuters) - Tata Consultancy Services Ltd (TCS.BO), India's top software services exporter, said it was seeing strong demand after posting a better-than-expected 21 percent rise in quarterly profit.
But the company expressed caution about economic conditions in Europe, its second-biggest market after the United States.
"Overall, demand outlook is very good, but you know the macro conditions," said its chief executive, N. Chandrasekaran. "We are carefully watching the macro environment," he told reporters.
Chandrasekaran said pricing for its services was stable and there was an opportunity for increases. He did not elaborate.
Tata Consultancy, whose clients include Citigroup (C.N), General Electric (GE.N), Lloyds TSB (LLOY.L), Ferrari and American International Group (AIG.N), raised its hiring target by 10,000 to 40,000 for 2010/11, reflecting strong demand.
Earlier this week, rival Infosys Technologies (INFY.BO) posted an unexpected decline in quarterly profit and said a weak European economy could curb new orders and dampen a recovery for India's outsourcing sector. [nSGE6680B5]
Research firm Forrester said in a report this month that Europe's volatile economic situation and uncertainty about corporate IT budgets would result in possible delays or cancellations of some outsourcing projects.
Tata Consultancy, Infosys and No. 3 ranked Wipro (WIPR.BO) have all boosted hiring and raised salaries by 10 to 20 percent on average to keep staff from being poached by global rivals, as demand for outsourcing rises.
Competition from IBM (IBM.N), Accenture (ACN.N) and Hewlett-Packard (HPQ.N) also poses risks to the $60 billion Indian technology sector, which manages complex computer networks and maintains technology operations for Fortune 500 customers.
Tata Consultancy, part of the Tata Group that spans the commodities, autos and services businesses, said net profit in the June quarter rose to 18.4 billion rupees ($395 million) from 15.2 billion rupees a year ago under U.S. accounting standards.
A Reuters poll had forecast net profit of 17.6 billion rupees.
Ahead of the company's earnings, shares in Tata Consultancy, which the market values at about $33 billion, ended 1.2 percent higher at 784.10 rupees, while the main Mumbai market .BSESN closed down 0.2 percent.
($1=46.6 rupees)
(Reporting by Prashant Mehra; Writing by Bharghavi Nagaraju; Editing by Muralikumar Anantharaman and Tony Munroe)
((bharghavi.nagaraju@thomsonreuters.com; +91 80 4135 5805; Reuters Messaging: bharghavi.nagaraju.reuters.com@reuters.net))
(If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) Keywords: TATACONSULTANCY/
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