India's TCS slides near 8% as earnings disappoint

Oct 18, 2011

Shares in India's biggest software exporter TCS plunged nearly eight percent on Tuesday, a day after the firm posted earnings figures that fell short of market expectations.

Tata Consultancy Services shares fell as much as 7.87 percent to a day's low of 1,031.65 in morning trade at the .

Some analysts said the results lacked "positive surprises" while one brokerage said growth from TCS's top 10 clients may have peaked, growing just 2.5 percent from the first to the second quarter this year.

TCS counts blue chip firms like General Electric, Citibank, and Sony among its main clients.

The software major, part of the salt-to-steel Tata conglomerate, showed a consolidated net profit of 24.39 billion rupees ($498 million) in the three months to September. Analysts widely expected a profit of 25 billion rupees.

The company said on Monday that the recent volatility in the foreign currency markets were a cause for concern. Global economic signals were being "closely watched" along with managing costs.

"The Q2 earnings lacked positive surprises," Hitesh Shah, analyst with IDFC Securities, said in a note to clients, highlighting the company's four percent fall in domestic revenues.

Shashi Bhusan, from Mumbai brokerage Prabhudas Lilladher, said the "below expectation" performance was due to slower growth in Latin America and "de-growth" in India.

"We believe that growth from the top 10 clients has peaked," he said in a report, telling AFP later: "They appear to have utilised most of their spending, which runs into billions of dollars.

"Overall, I see some amount of caution in client spending for 2012-13 onwards."

TCS revenues rose 26 percent to 92.86 billion rupees.

Explore further: Airbnb rental site raises $450 mn

add to favorites email to friend print save as pdf

Related Stories

India's TCS announces 14.7% Q2 profit jump

Oct 17, 2011

India's biggest software exporter, TCS, said Monday its quarterly net profit rose 14.7 percent, marginally below estimates, as concerns over global uncertainty offset improved outsourcing demand.

India's TCS quarterly profit jumps 21 percent

Jul 15, 2010

India's largest software exporter Tata Consultancy Services (TCS) reported Thursday its quarterly net profit jumped 21 percent, beating forecasts, as demand for outsourcing improved.

Wipro posts 9.7 percent profit rise, below forecast

Oct 22, 2010

India's third-biggest software firm Wipro reported Friday a lower-than-forecast 9.7 percent rise in quarterly net profit, blaming a higher rupee and wage costs for the disappointing earnings.

India software giant TCS profits up 30%

Jan 17, 2011

India's largest software exporter Tata Consultancy Services on Monday said profits rose nearly 30 percent in the third quarter, beating forecasts, as outsourcing orders strengthened.

Recommended for you

Ex-Apple chief plans mobile phone for India

4 hours ago

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

17 hours ago

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

US venture investments highest since 2001 (Update)

Apr 18, 2014

Funding for U.S. startup companies soared 57 percent in the first quarter to a level not seen since 2001, as venture capitalists piled more money into a growing number of deals, according to a report due out Friday.

User comments : 0

More news stories

Ex-Apple chief plans mobile phone for India

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

Health care site flagged in Heartbleed review

People with accounts on the enrollment website for President Barack Obama's signature health care law are being told to change their passwords following an administration-wide review of the government's vulnerability to the ...

A homemade solar lamp for developing countries

(Phys.org) —The solar lamp developed by the start-up LEDsafari is a more effective, safer, and less expensive form of illumination than the traditional oil lamp currently used by more than one billion people ...

NASA's space station Robonaut finally getting legs

Robonaut, the first out-of-this-world humanoid, is finally getting its space legs. For three years, Robonaut has had to manage from the waist up. This new pair of legs means the experimental robot—now stuck ...

Filipino tests negative for Middle East virus

A Filipino nurse who tested positive for the Middle East virus has been found free of infection in a subsequent examination after he returned home, Philippine health officials said Saturday.

Egypt archaeologists find ancient writer's tomb

Egypt's minister of antiquities says a team of Spanish archaeologists has discovered two tombs in the southern part of the country, one of them belonging to a writer and containing a trove of artifacts including reed pens ...