TCS profit beats estimates on demand for software services

TATA Consultancy Services’ (TCS) first-quarter profit beat analysts’ estimates after the IT services provider won orders in a tough climate for information-technology services.

Net income rose 17 per cent to 110.7 billion rupees (S$1.8 billion) in the quarter through June, TCS said in a statement on Wednesday (Jul 12). Analysts estimated 109.36 billion rupees on average. Sales climbed 13 per cent to 593.8 billion rupees.

India’s US$245 billion software services sector, led by TCS, is facing a slowdown as customers across industries curb information-technology expenditures to cope with higher interest rates and elevated levels of inflation. TCS is among companies trying to expand to higher-margin services powered by technologies such as artificial intelligence to keep fueling growth.

Even as economic challenges mount, Mumbai-based TCS has won some large contracts in recent months, including a deal potentially worth £1.5 billion (S$2.6 billion) with a UK pension company.

In a surprise announcement in March, former CEO Rajesh Gopinathan said he would step down from his post and depart from the company in September. K Krithivasan, who previously lead its banking and financial services business, took over at the start of June. BLOOMBERG