TCS reported a 38 percent rise in its fiscal first-quarter profit, beating market expectations, helped by a weaker rupee and increase in demand for outsourcing.
For TCS, not business environment, but the macros are challenging
Although it does not make official forecasts, TCS said it expects to beat the industry export revenue growth forecast of 11-14 percent for this fiscal year set by trade body Nasscom,
indicating that despite the challenges in the macro environment, deal pipeline remain healthy.
Speaking to CNBC- TV18, N Chandrasekaran, CEO & MD of the IT major said clients have learnt to adapt to the volatile environment prevailing right now. "The macros remain challenging, but clients are sticking to their decided spend," he said adding, “no staling of deal ramp-up seen".
He also dismissed concerns over stalled ramp ups in the US and Europe and said there has been no knee-jerk during a quarter or during a month. "None of our projects have been cancelled, things are on track."
However, Infosys CEO yesterday reiterated that global volatility and a tough business environment has prevented them from giving a quarterly guidance. "We are seeing sporadic price negotiations and some demands for discounts. We lost $13 million because of currency fluctuations and took a one-time write-off on a large transformational programme, SD Shubulal said yesterday.
Infosys, India’s second largest IT ,posted net profit of Rs 2,290 crore in the June quarter against Street expectations of Rs 2,483 crore.
The contrasting performances by India's two biggest software services exporters tracked their earnings results out on Thursday.
Infosys shares were down 0.8 percent after falling 8.4 percent on Thursday on the back of disappointing results, which were out before the market opened.
By contrast, TCS was poised for solid gains after its results late on Thursday.
TCS said in the first quarter, growth was seen across all industry segments led by retail, telecom and BFSI (Banking, Financial Services and Insurance). Infact the company signed three delas in the banking and financial services space this quarter alone as the BFS seems to be adopting technology to recover from the state they are at.
Pricing pressure weighed more heavily on Infosys than TCS during the quarter. Infosys’s billing rates were down 3.7% from the previous quarter, compared with 1% at TCS.
Watch the entire interview with TCS CEO N Chandrasekaran above.