Mumbai: Tata Consultancy Services Ltd, India’s top software services exporter, posted a 1.6% rise in quarterly profit, lagging expectations, as global economic turmoil crimps outsourcing and puts pressure on fees.
The firm, part of the Tata Group that spans autos, commodities and services businesses, said net profit rose to Rs13.52 billion ($276 million) in Oct-Dec from Rs13.31 billion rupees a year ago, under US accounting rules.
A Reuters poll of brokerages had forecast net profit of Rs14.13 billion for the company which counts Citigroup, General Electric and ABN AMRO among its main clients.
On Tuesday, rival Infosys Technologies beat market expectations with a one-third jump in quarterly profit but trimmed its annual forecast.
Nortel Networks, a client of Tata Consultancy and Infosys filed for bankruptcy on Wednesday, adding to the glum outlook.
Indian outsourcers benefitted from an army of English-speaking workers and relatively cheap wages, winning deals from mostly US clients, but the party ended last year after a turmoil in the key financial sector and as major global economies headed towards recession. Revelations of overstated profits at fourth-ranked Satyam Computer Services have added to the pressure on the $52 billion IT services sector.
Shares in Tata Consultancy, which provides consulting services and integrates IT systems, shed 28% in the December quarter, in line with the sector index