Tata Consultancy Services (TCS) has reported a healthy first quarter financial earnings report, with revenues reaching US$2.73 billion and a net income of US$604 million, driven by broad-based growth across all industry sectors.
In its financial statement released on Tuesday, the Indian IT services company said its revenues grew by 13.1 percent year-on-year to hit US$2.73 billion, while net income went up by 13.6 percent to reach US$604 million for the quarter ended Jun. 30, 2012. It also stated operating profits grew by 18.9 percent on-year to US$750 million.
Commenting on its first quarter performance, N Chandrasekaran, CEO and managing director at TCS, said: "We have seen strong, secular growth across all our service lines and industry segments driven by robust volumes from key markets like North America, Europe, and United Kingdom. We have also absorbed impact of wage hikes and maintained our profitability in a volatile setting."
He added that the company expects to see good demand from corporations globally even as they navigate across an increasingly complex IT environment.
TCS CFO and Executive Director S. Mahalingam also identified its ability to closely monitor and maintain its operating expenses to support higher revenues as a reason for the company keeping healthy margins.
He also said growth was seen across all industry segements, led by retail, telecom, and banking, financial services and insurance (BFSI). In terms of products, BPO (business process outsourcing), enterprise solutions and infrastructure servies were the main drivers for balanced growth across all IT and service lines, he added.
That said, the executive did caution the fluctuating foreign exchange may pose a challenge in the short term. "The unprecendented volatility among major currencies and the Indian rupee will continue to be a challenge in the short term and we are taking the steps to mitigate any risks arising from this scenario," Mahalingam stated.
Rival IT consulting firm Infosys also reported its first quarter earnings on Tuesday, recording US$1.75 billion in revenue for the same quarter, which represented a 4.8 percent growth year-on-year. However, the company lowered its guidance for the 2013 fiscal year, from the 8 to 10 percent revenue growth it projected earlier down to 5 percent to reach US$7.3 billion.