In Minutes, TCS Makes Investors Richer By Rs 30,000 Crore
Shares of Tata Consultancy Services Ltd (TCS) surged over 5 per cent after India's top software services exporter posted better-than-expected earnings in the March quarter. On BSE, TCS shares rose to 3,354.75 at day's high, sending its market capitalisation soaring by Rs 30,000 crore. Deal wins in the quarter to March helped the Mumbai-headquartered company post its biggest-ever net profit of Rs 6,904 crore, beating analysts' average estimate of Rs 6,798 crore. TCS, part of salt-to-software conglomerate Tata group, reported Rs 32,075 crore as income from operations, a rise of 8.2 percent from a year ago.
- TCS also announced a 1:1 bonus issue of shares
- In dollar terms, TCS revenues rose 11.7% year-on-year
- Glad to announce we are back to double digit trajectory: CEO
TCS also announced a 1:1 bonus issue of shares and a dividend of Rs 29 a share.
In dollar terms, TCS reported revenue of $4,972 million, up 3.9 per cent quarter-on-quarter and up 11.7 per cent year-on-year. "We're glad to announce we're back to double digit trajectory on dollar revenue growth," CEO and MD Rajesh Gopinathan said.
With improving economic outlook in key markets like the US and higher adoption of outsourcing in Europe and digital services gaining scale, fiscal year 2018-19 looks better for Indian IT companies, say analysts.
TCS expects a rebound in spending by its key banking, financial services and insurance (BFSI) clients this financial year. India's top software services exporter is more confident about BFSI revenues from North America as client discussions show there is "not much stress left in the system," and this could potentially translate into better client spending through the course of the year, said CEO Rajesh Gopinathan.
Mr Gopinathan said TCS' early investments in digital technologies such as cloud, analytics and big data were paying off as the company remained well-positioned to transform clients' businesses.
"The ability to transform comes from our ability to participate right from the back-end to the front-end and have a full spectrum of solutions." Gopinathan said.
"We are seeing strong demand in digital, in security and blockchain, in analytics, data," Chief Operating Officer N Ganapathy Subramaniam said. "All this gives us the confidence that BFSI should grow."
TCS' smaller rival Infosys Ltd kicked off the earnings season last week with a higher profit and a healthy revenue forecast for the year, though its margin guidance failed to cheer investors.