India's largest IT services company Tata Consultancy Services (TCS) on Thursday reported a decent set of fourth quarter earnings, which was in line with Street estimates, on the back of strong pricing and a favourable currency.
Expecting a vibrant demand environment, the company also indicated strong growth with robust hiring plans and a 12-14 per cent wage hike.
TCS has reported a revenue growth of 5.1 per cent sequentially to Rs 10,157 crore while profit after tax grew 10.7 per cent to Rs 2,623 crore quarter-on-quarter, which was better than expectations. The company has managed to maintain operating margins at 28 per cent against an expectation of a fall.
The company says the demand environment continues to be vibrant and it sees further uptick in pricing. N Chandrasekaran, MD & CEO, TCS said, “Demand environment is vibrant. Our full-services strategy and domain-intensive solutions give us great platform for growth. TCS continues to shape the adoption of next generation technologies by investing in new areas like mobility, analytics, social media & sustainability solutions.”
Analysts believe that the biggest IT services company in the country is showing the way. Deutsche Bank says TCS results indicate that demand will continue to look strong during the current fiscal. The aggressive wage hike and hiring targets confirm that the demand environment is looking strong.
Kotak said after the results that growth is ahead of its estimates. There is some weakness in financial and telecom sectors but other verticals are looking strong.
Ajoy Mukherjee, Global Head of HR, TCS said currency factor and pricing have favored the results and the company has bright hopes on this front in future. He also said the company is considering a wage hike of 12-14% in India, 2-4% in emerging markets and 2-10% in other markets.
TCS believes the growth going forward will continue to remain volume-led with some uptick in pricing. Analysts and investors expect TCS to continue maintaining the growth momentum and shake off any blues left behind by industry peer Infosys.
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