Indian software giant Tata Consultancy Services Ltd (TCS) shares gained 12.4 percent in Mumbai trading on Tuesday morning, piggybacking on the company's robust outlook and a 23 percent surge in fourth quarter profits.
TCS, India's largest software exporter, announced its fourth quarter results after the markets closed Monday. Cheerful numbers on course with the industry expectations helped TCS shares record steady gains in an otherwise sluggish Indian market on Tuesday. The quarterly numbers were more bullish for it than for its immediate rival Infosys, which has predicted a worse-than-expected forecast for the year ending next March.
TCS posted a net profit of Rs. 29.3 billion for the quarter ended March 31, while its revenue for the same period rose by 30.5 percent on a year-on-year basis to 132.6 billion. Net profit for the fourth quarter ended March 2011 was Rs. 23.9 billion.
TCS, a part of India's largest industrial conglomerate TATA group, said it expects to exceed the revenue growth rate set for the industry for the fiscal year.
We have carried our strong momentum through the fourth quarter to close out a year of strong growth. We have kept our focus on profitability and consolidated our market leadership, TCS CEO and MD N Chandrasekaran, said in statement.
TCS is well prepared to achieve balanced growth across the industries and markets it operates in, given its holistic portfolio of services which are now achieving significant scale across markets, he added.
TCS also announced an 8 percent hike in wages for the workers. Infosys, which lost its sheen after a series of disappointing quarter results, had said it would not hike the wages for the year.
Infosys shares had fallen 12.5 percent in Mumbai trading following the April 13 announcement of its below-the-par fourth quarter results. However, analysts feel that buoyant TCS results indicate a healthy growth rate for the Indian IT sector for the 2012 fiscal year.
The negative impact created by Infosys may be diluted to a large extent, R.K. Gupta, managing director of Taurus Asset Management, told Reuters.
The fourth-ranked Indian IT company HCL Technologies Ltd also had posted fourth quarter results that exceeded the industry expectations, last week.
As much as 70 percent of Indian IT service sector revenue comes from exports to the US and European Union.
TCS shares traded at a 12.84 percent high in Bombay Stock Exchange at noon on Tuesday.