Friday, 14 October 2016

TCS QUARTERLY GROWTH FLAT IN JULY-SEPT

TCS quarterly growth flat in July-Sept


Slowdown In Tech Spends By Banking, Retail Weighs

Tata Consultancy Services (TCS) reported a near-flat sequential dollar revenue growth in the second quarter, its slowest in four quarters -a trend that most of the other leading Indian IT services companies too are expected to witness given the slowdown in technology spends by major industry segments such as banking, financial services and insurance (BFSI).

The company , India's biggest software services exporter, said revenue rose 0.27% to $4.37 billion for the quarter ended September 30, from $4.36 billion in the earlier quarter.
When compared to the same period last year, revenue rose 5.2%. On constant currency (discounting the impact of currency fluctuations), the sequential revenue growth was 1%, which widely missed many analysts' estimates.

“It has been an unusual Q2 for TCS. Growing uncertainties in the environment is creating caution among customers and resulted in holdbacks in discretionary spending this quarter. In addition, volatility in markets like India and Latin America muted revenue growth,“ chief executive N Chandrasekaran said in a statement on Thursday .

Such muted results suggest that Infosys and Wipro, which report results on Friday and next week respectively, too will disappoint. Indian IT companies have eit her lowered their guidance over the year or warned investors of sequential lower revenue due to volatile macroeconomic conditions in Europe post the Brexit vote, currency fluctuations, slower ramp-ups in large deals won previously , and the low interest regime in the US.

TCS had observed last month that discretionary spends on IT were getting delayed, resulting in sequential loss of growth momentum. Chandrasekaran said the softness in the market was expected to continue. “We had a negative surprise from India, with delay in order execution worth Rs 180 crore ($30 million) getting spilled over into the current quarter. That is why growth decelerated by 7.6%,“ he said.


 (Toi)

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