Tata Consultancy Services (TCS), India's biggest software services exporter, beat profit estimates for the October to December quarter reaffirming its leadership in India's $100 billion IT outsourcing industry.
TCS said net profit for the fiscal third quarter rose to Rs 3,550 crore against Rs 3,512 crore in the second quarter. On a year-on-year basis, net profit rose 23 per cent from Rs 2,887 crore a year ago. Sales jumped 2.9 per cent sequentially to Rs 16,070 crore against Rs 15,620 crore in the September quarter.
Analysts had estimated TCS would report Rs 3,402 crore in profit after tax and Rs 15,970 crore in sales.
Operating margins declined to 27.3 per cent from 29.2 per cent in the last quarter, but net margins were almost flat at 22.1 per cent against 21.9 per cent.
TCS CEO N. Chandrasekaran said, "We have had an excellent quarter of well rounded performance and have driven a higher quality of revenue and increased profitability through focus on productivity and innovation.
We had good revenue growth, balanced across service-lines, industries and geographies; our agile, customer-centric organization is delivering an increasing number of larger and deeper client relationships."
TCS has emerged as the favourite IT stock for a lot of investors because of the underperformance of Infosys recently.
TCS, which does not provide detailed revenue forecasts, has maintained it expects to beat the industry's export revenue growth forecast set by the National Association of Software and Service Companies (NASSCOM).
In November, NASSCOM said the sector was likely to meet the lower end of its revenue growth outlook of 11-14 percent for the year ending in March.
TCS added two over $100 million clients, taking the total number to 16. The company added net 9,561 employees in the last quarter. The utilization rate stood at 81.7 per cent, much better than Infosys.
Shares in TCS closed 2.14 per cent higher at Rs 1,334.30 on the Bombay Stock Exchange (BSE) against a 1.2 per cent rise in the broader BSE Sensex.
TCS' strong performance, which follows a similar show by Infosys on Friday, has fuelled hopes of a broad pickup in tech spending.
(With inputs from Reuters)
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