MUMBAI - Tata Consultancy Services glided past street estimates with a 33 percent rise in quarterly profit as demand for outsourcing surged and prices stabilised, fuelling hopes of recovery in the showpiece sector.

India's top software services exporter is seeing increased demand for services from all its business segments and the company has a healthy deal pipeline, Chief Executive N. Chandrasekaran told reporters on Friday.

We are seeing a broader recovery happening, he said, adding the deal flows were coming back to the pre-Lehman crisis levels as western companies focus on reducing operational costs and boosting efficiency.

However, pricing is likely to remain flat in the near-term, Chandrasekaran said. It will take at least a few more quarters for pricing power to return.

A global economy on the mend, recent deal wins, and stable prices have brightened the outlook for export-driven Indian IT companies such as Tata Consultancy and rival Infosys Technologies, after the world recession hit the sector.

Infosys, a trendsetter for the $60 billion Indian outsourcing sector, raised forecasts on Tuesday as big financial services clients boost orders in an improving global economy.

The rupee, which rallied to a 15-month high last week, surging wages and intense competition from global firms such as IBM, Accenture and Hewlett-Packard are seen as key risks for the sector.

The software services sector gets more than half its revenue from the United States but companies are furiously expanding in Asia Pacific, Latin America and the Middle East.

Ahead of the announcement, shares in Tata Consultancy, which provides services such as consulting, system integration and back-office outsourcing, ended up 1.3 percent at 791.80 rupees in a Mumbai market .BSESN down 0.2 percent.

The firm, part of the Tata Group that spans commodities autos and services businesses, said net profit in October-December rose to 17.97 billion rupees ($392 million) from 13.52 billion rupees reported a year ago under U.S. accounting rules.

A Reuters poll of 15 brokerages forecast a net profit of 16.04 billion rupees for the firm which counts Citigroup, General Electric, General Motors, Lloyds TSB, Ferrari and American International Group among its clients.

Tata Consultancy's quarterly profit under the Indian accounting standards was 18.24 billion rupees.

Revenue increased 5 percent from a year ago period to 76.50 billion rupees, as it added 32 new customers including a $100 million deal spread over five years from a manufacturing company, taking the total tally to 917.

Shares in Tata Consultancy, which the market values at $34 billion, more than tripled in 2009, compared with a surge of 81 percent in the main market. ($1=45.8 rupees)

(Writing by Sumeet Chatterjee; Editing by David Cowell)