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TCS Reports 8% Rise In Profits Despite Sales Hiccup

Tata Consultancy Services Ltd (TCS) reported an 8.4% rise in second-quarter profits, despite saying some clients had been holding back on spending due to an uncertain business climate.
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Tata Consultancy Services Ltd (TCS) reported an 8.4 per cent rise in second-quarter profits.
Tata Consultancy Services Ltd (TCS) reported an 8.4 per cent rise in second-quarter profits.
Mumbai: Indian IT outsourcing group Tata Consultancy Services Ltd (TCS) reported an 8.4 per cent rise in second-quarter profits on Thursday, despite saying some clients had been holding back on spending due to an uncertain business climate.

TCS first warned in September that its financial sector clients were holding back on discretionary spending. The United States is the biggest market for India's $150 billion software services outsourcing industry, followed by Europe.

Net profit in the three months ended Sept. 30 rose to Rs 6,586 crore ($989 million), up from Rs 6,073 crore in the same period last year and ahead of analysts' forecasts of around Rs 6,293 crore.

Revenue for the quarter increased by 7.8 per cent on the same period last year to Rs 29,284 crore, a rise of just 0.1 per cent on the previous three months.

TCS Chief Executive N. Chandrasekaran called it an "unusual" second quarter for the company, but was optimistic for the future.

"Growing uncertainties in the environment is creating caution among customers and resulted in holdbacks in discretionary spending this quarter," Chandrasekaran said in a statement.

"With technology increasingly at the forefront of business, we are confident that this is temporary," he said.

TCS first warned in September that its financial sector clients were holding back on discretionary spending. The United States is the biggest market for India's $150 billion software services outsourcing industry, followed by Europe.

The company has said it will push into digital services such as big data, cloud computing, and artificial intelligence among other things, as it seeks to expand beyond its traditional business and boost revenues.

During the September quarter, TCS said it added one client contributing annual revenues of more than $50 million, and six in the $20 million-plus band. It had gross employee additions of 22,665 during the quarter, taking its total to 371,519.

Ahead of the results shares in TCS, valued at nearly $70 billion, fell 2.2 per cent in a Mumbai market that closed 1.6 per cent lower. The company is India's biggest by market capitalisation.

TCS' closest rival Infosys Ltd is due to report quarterly results on Friday.

($1 = Rs 66.5919)

© Thomson Reuters 2016



(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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