It’s not a statement that the top brass at Tata Consultancy Services (TCS) will warm up to but the country’s largest IT exporter is increasingly beginning to look similar to its nearest rival, Infosys Technologies, when it comes to profit aggression.
After overtaking Infosys in profits for the first time a few quarters ago, TCS has now upped its rival by posting a higher, 11% sequential rise in net profit to Rs 1,824 crore.
The growth was aided by tighter cost-control measures implemented in the tougher quarters and lower forex exposure but, as TCS CFO S Mahalingam says, this quarter was a business story.
Cut to TCS CEO N Chandrasekaran. The 46-year-old is easy in his manner but like nifty piece of software which has miles of code behind it, his words are measured. At its third quarter results announcement, Mr Chandrasekaran was emphatic about the nature of growth that the company delivered. And in an exclusive interview with ET, he made that point again.
“I am happy with the nature of growth. We saw very good growth volumes including in the troubled sectors of manufacturing, hi-tech and retail. I was expecting de-growth or flat growth... They didn’t grow significantly but they grew,” Mr Chandrasekaran said. This is where the country’s largest and second largest exporter differ. While Infosys’ growth was led by financial services, TCS saw all-round growth.
This will also set the stage for the next phase of growth as Mr Chandrasekaran and his team start focussing on bringing in more volume of business from other sectors to over 5% sequential growth.
“Volume growth is above 5% only in couple of verticals (sectors). I want to see that growth comes in at least three or four verticals. It doesn’t matter which ones but we need to have a portfolio of verticals which are growing at good volumes. Currently verticals such as BFSI (banking financial services, insurance) and retail are in high single digits, others are in low single digits,” he said.
The next boost for TCS, and probably for the IT industry, could be discretionary IT spends opening up. During the recession, IT spends have been restricted to keeping existing systems running, while spending on new projects or discretionary spending has either dried up or shrunk. There have been early indicators of that in higher orders for the consulting and enterprise solutions business for TCS.
Source : http://economictimes.indiatimes.com/news/news-by-company/earnings/TCS-beats-Infosys-in-posting-higher-profits/articleshow/5475013.cms
After overtaking Infosys in profits for the first time a few quarters ago, TCS has now upped its rival by posting a higher, 11% sequential rise in net profit to Rs 1,824 crore.
The growth was aided by tighter cost-control measures implemented in the tougher quarters and lower forex exposure but, as TCS CFO S Mahalingam says, this quarter was a business story.
Cut to TCS CEO N Chandrasekaran. The 46-year-old is easy in his manner but like nifty piece of software which has miles of code behind it, his words are measured. At its third quarter results announcement, Mr Chandrasekaran was emphatic about the nature of growth that the company delivered. And in an exclusive interview with ET, he made that point again.
“I am happy with the nature of growth. We saw very good growth volumes including in the troubled sectors of manufacturing, hi-tech and retail. I was expecting de-growth or flat growth... They didn’t grow significantly but they grew,” Mr Chandrasekaran said. This is where the country’s largest and second largest exporter differ. While Infosys’ growth was led by financial services, TCS saw all-round growth.
This will also set the stage for the next phase of growth as Mr Chandrasekaran and his team start focussing on bringing in more volume of business from other sectors to over 5% sequential growth.
“Volume growth is above 5% only in couple of verticals (sectors). I want to see that growth comes in at least three or four verticals. It doesn’t matter which ones but we need to have a portfolio of verticals which are growing at good volumes. Currently verticals such as BFSI (banking financial services, insurance) and retail are in high single digits, others are in low single digits,” he said.
The next boost for TCS, and probably for the IT industry, could be discretionary IT spends opening up. During the recession, IT spends have been restricted to keeping existing systems running, while spending on new projects or discretionary spending has either dried up or shrunk. There have been early indicators of that in higher orders for the consulting and enterprise solutions business for TCS.
Source : http://economictimes.indiatimes.com/news/news-by-company/earnings/TCS-beats-Infosys-in-posting-higher-profits/articleshow/5475013.cms
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