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.
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