TCS Q1 net profit lower than Infosys’s

Mumbai, July 16 : The tech party seems to be getting over. Tata Consultancy Services (TCS), India’s largest software company, on Wednesday said that it posted a profit after tax of Rs 1,291 crore for the first quarter of fiscal 2009, up 7 per cent compared with the same period last year, and 4 per cent quarter-on-quarter. However, this was lower than competitor Infosys’ net profit for the quarter at Rs 1,302 crore.

TCS growth was driven by an 8 per cent rise in business in the company’s major markets, including North America, the UK and Europe, despite the current economic slowdown, and a traction in the manufacturing, life sciences and retail verticals. Revenues for the period stood at Rs 6,411 crore, up 24 per cent compared with Q1 of FY08, and 6 per cent quarter-on-quarter. Earnings per share stood at Rs 13.19 and the company added 35 new clients during the period. It also announced a dividend of Rs 3 per share.

Although the results came in after market hours, the TCS stock was down 2.98 per cent on the BSE to close at Rs 727.35. The stock also registered a 52-week low of Rs 719.10.

The company said that it had launched a “pro-active cost-control programme” to maintain operating margins and the new vertical organisation structure was driving its full services play. S Ramadorai, chief executive officer and managing director, said, “We have been able to respond to the challenging macro environment and drive growth in the business under tough operating conditions and manage costs. TCS is cautiously optimistic about the rest of the year.”

Analysts said the topline growth was mainly due to rupee depreciation. Software firms were projected to show weak earnings, hit by weak economic conditions in the US, which accounts for a majority of the market for exporters.

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