TCS Watching Brexit As First Quarter Beats Estimates

Mumbai: 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 per cent rise in first-quarter profit.

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 per cent.

"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.

Mr 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 Rs 6,317 crore ($944 million) for its fiscal first quarter to June 30 from a year earlier under IFRS accounting standards, ahead of analysts' expectation of Rs 6,088 crore.

Revenue grew 14 per cent to Rs 29,305 crore 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 per cent higher, ahead of a 0.5 per cent gain in the broader NSE index.

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