Goutam Das
India's largest information technology services company
Tata Consultancy Services (TCS) on Monday reported encouraging fourth quarter results, hinting that all was fine with the industry, quite in contrast to nearest rival
Infosys's gloomy forecasts on April 13.
TCS met analyst expectations for the three months to March 31, 2012, generating profits of Rs 2,932.4 crore, up 1.6 per cent over the previous quarter. Revenues, nevertheless, were only marginally up at Rs 13,259.3 crore. For the full year 2011/12, the company pulled in a topline of Rs 48,894 crore, a spike of 31 per cent over the previous year.
But what will cheer the markets is the company's commentary on the
demand environment this year. The firm plans to hire 50,000 employees in year 2012-13 and will be doling out wage hikes in the range of eight per cent. While TCS does not provide full year guidance, CEO N Chandrasekaran said that the firm's results would come ahead of industry lobby
Nasscom 's projections of 11-14 per cent growth for 2012/13. Infosys, in contrast, had guided to a growth of 8-10 per cent.
"The deal momentum is good, the closures are good and so is the pipeline. Next year will be a good year. The pricing is stable," the CEO said during a press conference in Mumbai.
TCS now has increased its revenue lead over
Infosys. The topline lead now stands at a staggering Rs 15,160 crore. In 2006/07, the revenue difference between the two firms was just Rs 4,792 crore. TCS has been consistently growing faster and in 2011/12 grew at 31 per cent versus Infosys that managed a full year growth rate of 23 per cent.
An executive from a rival top tier company had this to comment post the announcement: "TCS has understood operating in the new normal. They have cracked the code."
Commenting on the results, Dipen Shah, analyst with Kotak Securities said that the 3.3 per cent volume growth that the firm reported in Q4 was encouraging in a tough macro environment. "The management is also pretty confident of growing above the NASSCOM average growth rate for 2012/13. We understand the company has adequate visibility on customer spends and its own market share within that spend. TCS remains our preferred pick in the large cap space," he said.
Shares of TCS closed 2.77 per cent down on the BSE at Rs 1,059.25 on Monday.
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