Tata Consultancy Services (TCS) reigned as the number one IT exporter by beating market estimates of its performance. It outperformed rival Infosys by posting a 12.1 percent growth in revenues since the last quarter. While Infosys remained bearish on demand and attributed its shortfall in performance to the macro business environment and the global slowdown, TCS, in a contrarian view said that it has not seen any delays in client decision making and continues to benefit from healthy demand and pipeline of projects.
The National Association of Software and Services Companies (NASSCOM), the trade organization of Indian IT companies estimated the sector to grow at 11-14 percent in FY13. Infosys at its Q1 results noted that it is an ambitious estimate for the industry this year. TCS, on the other hand expects to beat that. “Since we have not seen any major change in the business environment, we expect to deliver above the Nasscom estimates,” said N Chandrasekaran, the company’s CEO and MD.
Dipen Shah from Kotak Securities said “TCS’ volume growth was 5.3% and that was higher than that reported by Infosys. The management has maintained its optimistic outlook despite the uncertain macro scene and in contrast to cautious comments from Infosys.”
However Broking firm Equirus Securities was concerned that the industry is generally facing slower growth rates. “These numbers are pretty good when you compare it to what Infosys reported. But I would say that these numbers also emphasize that the industry is facing slower growth rates, said Bhavin Shah, CEO, Equirus Securities.
Ankita Somani of Angel Broking has trimmed her expectation on Infosys while being bullish on TCS. “The results were better than expectations in terms of sales and profit. We expect TCS to grow by mid-double digits, while Infosys expected to grow not more than 5-6% for the year ended March 2013.”