TCS declares profits cautious about future

COMPANY OF PROFIT: India's largest IT company declares quarterly results.

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New Delhi: Tata Consultancy Services, India's largest IT firm, on Thursday declared its first quarter results, declaring a profit of Rs 1,255.9 crore.

“I think Q3-Q4 and the subsequent quarters are going to see some happenings which are on the growth mode. But more importantly, the cautious optimism is because we don’t know how things are going to pan out on the global economic factors and thats the worrisome part of it . But fundamentally people are beginning to look lot of positively than before,” said S Ramadorai, CMD of TCS.

TCS saw profit grew due to major markets like US, UK and Europe. However, it says that business from banking and the financial services space is still a cause of concern. The meltdown of UBS, Lehman Brothers because of the subprime crisis has hit the IT major hard because these companies were major clients of TCS.

“The results in revenue terms were pretty much in line. But in terms of margin contraction it is a little more severe than what I anticipated. Probably the company was not able to improve its utilisation rates. The top client account didn't grow as much as anticipated,” said R Ravi, of Karvy Stock Broking.

Cautiously optimistic is the common refrain from TCS today and Infosys earlier. What it seems to suggest is that there is still rough weather to be faced in the global turmoil , but Indian IT majors may be best placed to weather the storm.