India's TCS expects strong deal momentum to drive growth
By Nivedita Bhattacharjee and Aman Shah
MUMBAI (Reuters) - Tata Consultancy Services (TCS) Ltd, India's biggest software services exporter, posted a 5.1 percent rise in quarterly net profit, and said it expected strong outsourcing deals momentum to boost growth in the quarters ahead.
The company, part of India's 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," Chandrasekaran said.
TCS' net profit for the quarter ended on December 31 rose to 54.44 billion rupees (576.18 million pounds) from 51.78 billion rupees in the year-ago period, the Mumbai-based company said in a statement on Thursday.
Analysts, on average, were expecting profit to be at 54.71 billion rupees, according to Thomson Reuters data.
Revenue for the three months, the company's financial third quarter, rose 15 percent to 245.01 billion rupees.
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 percent ahead of the results in a Mumbai market that was up 2.66 percent 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 percent from last year, research firm Gartner Inc said on Monday. The growth forecast is, however, down from its earlier projection of 3.9 percent due to strengthening of the dollar.
(Editing by Sumeet Chatterjee and Vincent Baby)
