By Harichandan Arakali and Aradhana Aravindan
BANGALORE/MUMBAI, July 18 Tata Consultancy
Services, India's largest software services exporter,
posted a 17 percent rise in quarterly profit and maintained an
upbeat outlook, fuelled by demand from the United States.
TCS's results, driven by its highest sales volume growth in
seven quarters, reinforce expectations that Indian IT vendors
will be helped by the strongest demand from U.S. businesses
since the end of the 2008-9 financial crisis.
The United States is the biggest market for India's $108
billion IT sector.
"Our pipeline is very very good, not only in the U.S. but
also elsewhere," Chief Executive N Chandrasekaran told reporters
after the company released results for its financial first
TCS, part of the salt-to-steel Tata conglomerate, India's
biggest business house, does not give a revenue forecast, but
Chandrasekaran maintained his earlier view that the company will
grow faster than the industry.
That is typically taken to mean the industry lobby group
National Association of Software and Services Companies' outlook
for exports growth, pegged at a 12-14 percent this financial
Consolidated net profit for the quarter ended June 30 rose
to 38.31 billion rupees ($642 million) from 32.8 billion rupees
a year earlier. That topped the 37.8 billion rupees average of
24 analyst estimates, according to Thomson Reuters I/B/E/S.
"I think demand should get a little bit better from here
onwards. If the U.S. economy is moving in the right direction in
its own growth, then it definitely aids the Indian providers,"
said Kuldeep Koul, an analyst at ICICI Securities.
Sales rose 21 percent over the year-earlier period to 179.9
billion rupees and operating margins rose 50 basis points over
the previous quarter to 26.9 percent.
The U.S. outlook for Indian IT outsourcers is clouded by
pending immigration legislation that could make it more
difficult and expensive to send workers there on temporary
visas, a important element of the industry's business model.
Last week, rival Infosys posted-better-than
expected results. Bangalore-based Infosys, which had lost ground
to TCS in recent quarters, was cautiously optimistic about
client spending on its services after beating profit estimates
and retaining its sales forecast for the year ending in March.
TCS, whose customers include Citigroup, BP PLC,
and AstraZeneca PLC, announced its results after the
Mumbai markets closed. Its shares were down about 1 percent
compared with a 1 percent gain in the overall index.