Tata Consultancy Services reported its slowest quarterly profit growth since 2020. Largest software exporter Tata Consultancy Services (TCS) on Thursday reported an 8.2 per cent growth in net income for the December quarter at Rs 11,735 crore, driven by a massive growth in the home market that offset to a large extent the impact of a 3 per cent degrowth in the US market.
Net income was impacted by legal settlement in the US
The management, led by chief executive K Krithivasan, said the net income was impacted by a $125 million out of the $140 million charge it had taken for a legal settlement in the US during the quarter.
No change in situation in the US and Europe market
“From our perspective, the (macro) situation hasn’t changed much,” TCS CEO K. Krithivasan said in a post-earnings conference. Tata Consultancy Services said it was hard to predict a recovery in demand for IT services in the next two quarters as persistent inflation and recession fears pressure client spending in the company’s key markets – the US and Europe. Both Krithivasan and chief operating officer and executive director N Ganapathy Subramaniam guided towards tepid quarters ahead saying, “it is too early to call the muted sentiment in the US because we have not yet seen any change in the sentiment on the ground level,” and refused to predict when they will see a change.
Order book looks fine
He said that the order book stood at $8.1 billion, adding that the net cash from operations stood at Rs 11,276 crore.
India market helped
Krithivasan credited “sustained cloud demand and operational excellence” along with “the very strong double-digit growth in emerging markets, led by India where it has clipped past 23.4 percent growth in orders” for the reasonably good shown in the traditionally weak quarter.
Net income was impacted by legal settlement in the US
The management, led by chief executive K Krithivasan, said the net income was impacted by a $125 million out of the $140 million charge it had taken for a legal settlement in the US during the quarter.
No change in situation in the US and Europe market
“From our perspective, the (macro) situation hasn’t changed much,” TCS CEO K. Krithivasan said in a post-earnings conference. Tata Consultancy Services said it was hard to predict a recovery in demand for IT services in the next two quarters as persistent inflation and recession fears pressure client spending in the company’s key markets – the US and Europe. Both Krithivasan and chief operating officer and executive director N Ganapathy Subramaniam guided towards tepid quarters ahead saying, “it is too early to call the muted sentiment in the US because we have not yet seen any change in the sentiment on the ground level,” and refused to predict when they will see a change.
Order book looks fine
He said that the order book stood at $8.1 billion, adding that the net cash from operations stood at Rs 11,276 crore.
India market helped
Krithivasan credited “sustained cloud demand and operational excellence” along with “the very strong double-digit growth in emerging markets, led by India where it has clipped past 23.4 percent growth in orders” for the reasonably good shown in the traditionally weak quarter.