India's TCS declares weak fourth quarter result
Tata Consultancy Services said on Wednesday fourth-quarter results were weaker than it had expected as some of the IT company’s clients in the North American banking space deferred project spending amid the U.S. financial crisis.
Tata Consultancy Services (TCS.NS) said on Wednesday fourth-quarter results were weaker than it had expected as some of the IT company’s clients in the North American banking space deferred project spending amid the U.S. financial crisis.
India’s top IT exporter flagged “a lot of uncertainty” in its banking, financial services and insurance segment over the near-term in the North American market as clients rushed to conserve cash.
“The quarter has come out weaker than what we originally anticipated and primarily coming out of North America,” TCS CEO Rajesh Gopinathan said in a media conference.
A meaningful recovery in North America has not materialised as expected and has worsened instead, he said.
The collapse of two mid-sized U.S. lenders in March had left the financial ecosystem shaken and driven an extraordinary government effort to reassure depositors and backstop the system.
“It is difficult for us to call how long this will last and how the near- to medium-term will turn out,” Gopinathan said.
TCS is the first among its peers to report quarterly earnings, setting the tone for an industry that is also staring at a recession in its major markets – the U.S. and Europe.
The results also come as the company goes through a CEO transition, with K Krithivasan taking over as the top role on June 1 in place of Rajesh Gopinathan, who resigned in March.
Quarterly net profit rose 14.8% to 113.92 billion rupees ($1.39 billion), topping analysts’ expectations of 110.13 billion rupees, according to Refinitiv IBES data.
Its January-March order book stood at $10 billion, down 11.5% from a year ago, but with an “all-time high number of large deals.” For the ongoing quarter, TCS forecast a range of $7 billion to $9 billion.