Money News

TCS says watching Brexit as first quarter beats estimates

MUMBAI (Reuters) - India’s Tata Consultancy Services Ltd (TCS) said it will watch out for any impact from Britain’s move to exit the European Union as the country’s top software services exporter reported a better-than-expected 10.7 percent rise in first-quarter profit.

Slideshow ( 3 images )

Europe is the second-biggest market after the United States for India’s software services companies. United Kingdom accounts for 14.8 percent of TCS’ revenue, while the rest of Europe contributes 11.5 percent.

“Based on anything I’ve heard from any client, I don’t have any negative input at this point,” TCS Chief Executive N. Chandrasekaran told a news conference.

“Having said that, we need to watch how Brexit plays out, how companies react, especially financial institutions,” he said, adding the company was in touch with key customers.

Chandrasekaran also said TCS’ deal pipeline looked “very good” and that the company was hopeful of pushing for some price increases in areas such as digital, consulting and automation.

TCS on Thursday reported a net profit of 63.17 billion rupees ($944 million) for its fiscal first quarter to June 30 from a year earlier under IFRS accounting standards, ahead of analysts’ expectation of 60.88 billion rupees.

Revenue grew 14 percent to 293.05 billion rupees in the June quarter from the same period last year, TCS also said in a statement.

During the quarter, the company added four clients that contributed over $50 million each, and six with annual billing of more than $20 million each, it said.

Ahead of the results, TCS shares, valued at about $74 billion, closed 1.2 percent higher, ahead of a 0.5 percent gain in the broader NSE index.

The stock is up 3.5 percent this year, compared to a 7.8 percent rise in the main market index. TCS also underperformed a 6.4 percent gain in closest rival Infosys Ltd, which reports results on Friday.

($1 = 66.9200 Indian rupees)

Writing and additional reporting by Devidutta Tripathy; Editing by Rafael Nam and Keith Weir