TCS rises on prospects for market share gain
Shares in Tata Consultancy Services shot up as much as 9.7 per cent early on Tuesday, a day after India's top software services exporter said it expects to outperform the sector outlook, an indication it is poised to gain at the expense of rival Infosys Ltd.
TCS' 23 per cent rise in fiscal fourth-quarter profit, reported after markets closed on Monday, was in line with expectations.
However, the company's comments on its near-term prospects were far more bullish than those of Infosys, which on April 13 missed its own revenue guidance and gave a worse-than-expected forecast for the year ending next March.
"Solid, but appears to be inline, quarter. We believe confirms our view that Infosys is losing share. TCS' wage plan will further challenge Infosys in our view," Wells Fargo Securities analysts said in a note after TCS' earnings report.
Infosys shares fell nearly 5 per cent on Tuesday morning before paring losses. They had tumbled as much as 12.5 per cent the day the company posted earnings early this month.
Tata Consultancy, which gave an average 8 per cent salary increase to its staff in India and announced plans to hire 50,000 people this fiscal year, is on track to grow faster than the sector, chief executive N. Chandrasekaran told reporters on Monday.
India's $100-billion-a-year information technology and back office services sector will grow 11-14 percent in the current fiscal year ending March, the National Association of Software and Service Companies, or Nasscom, an industry group, estimates.
TCS shares were up 9.33 per cent at 10:55 a.m. (05.25 GMT) in a broader market that was up just over 0.1 per cent. Third-ranked Wipro Ltd will report earnings on Wednesday.
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