TCS Expects Strong Deal Momentum to Drive Growth

TCS Expects Strong Deal Momentum to Drive Growth
Mumbai: Tata Consultancy Services (TCS), India's biggest software services exporter, posted a 5.1 per cent rise in quarterly net profit, and said it expected strong outsourcing deals momentum to boost growth in the quarters ahead.

The company, part of the diversified Tata Group, listed a move to newer technologies and its presence across emerging economies, aside from its core geographies of the United States and Europe, as key drivers of growth in the future.

Growing competition and slowing growth have forced India's outsourcing companies, which had thrived for decades by writing software codes and providing IT infrastructure services, to look to higher margin digital technologies to increase revenues.

"Indications from customers are very positive. Key industries in which we operate are seeing good momentum and deal sizes are good as well," TCS chief executive N Chandrasekaran told reporters.

"We invest a lot on training. We are training people in digital in thousands," he said.

Tata Consultancy Services' net profit for the quarter that ended on December 31 rose to Rs 5,444 crore ($877 million) from Rs 5,178 crore in the year-ago period, the Mumbai-based company said in a statement on Thursday.

Analysts, on average, were expecting profit to be at Rs 5,471 crore, according to Thomson Reuters data.

Revenue for the three months, the company's financial third quarter, rose 15 per cent to Rs 24,501 crore.

The year-end holidays in western markets usually mean weaker third-quarter sales for IT firms in India's $100 billion-plus outsourcing sector, and TCS said in December it saw quarterly profit to be "in line with seasonal trends".

Shares in TCS closed up 1.07 per cent ahead of the results in a Mumbai market that was up 2.66 per cent on Thursday.

Infosys Ltd, India's second-largest software services exporter, last week cheered investors by sticking to its full-year sales target, thanks to healthy demand that helped offset the impact of a stronger dollar.

Global IT spending will touch $3.8 trillion in 2015, a rise of 2.4 per cent from last year, research firm Gartner Inc said on Monday. The growth forecast is, however, down from its earlier projection of 3.9 per cent due to strengthening of the dollar.

Copyright @ Thomson Reuters 2015

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