BENGALURU (Reuters) – Tata Consultancy Services (TCS) on Friday reported higher December-quarter profit and predicted stronger growth ahead, as India’s top IT firm benefits from greater demand for its cloud services during the COVID-19 pandemic.
The results kick off India’s corporate earnings season for a seasonally weak quarter for the software industry, but one that was likely positive for software services exporters like TCS in 2020, thanks in part to the coronavirus crisis.
TCS and rivals Infosys and Wipro have been winning more large contracts from businesses that are investing in services such as cloud-computing and cyber-security to support their shift to remote work.
“We are now confident about the year ahead,” TCS Chief Executive Officer Rajesh Gopinathan said in a virtual press briefing.
“We should be able to get back to our aspirational double-digit growth trajectory, both for the calendar year and financial year ahead.”
The outlook is in sharp contrast with TCS’s results from last July, when clients across Europe and North America had cut back on IT spending as the still-unfolding health crisis battered the global economy.
The Mumbai-based company also said revenue from the banking, financial services and insurance (BFSI) industry, its top revenue contributor, jumped 7.6% year-over-year to 166.55 billion rupees ($2.27 billion) in the three months to Dec. 31, 2020.
The company’s total contract value from the BFSI category and the North America region each hit all-time highs in the quarter, Gopinathan said.
While growth from North America and Europe was picking up, the United Kingdom’s banking sector “continued to be a bit stressed,” he added.
TCS’s net profit jumped 7.2% to 87.01 billion rupees in the December quarter. Analysts on average had expected earnings of 84.01 billion rupees, according to Refinitiv data.
Revenue from operations grew 5.4% to 420.15 billion rupees.
($1 = 73.2804 Indian rupees)
Reporting by Sachin Ravikumar in Bengaluru; editing by Uttaresh.V