TCS Q1 profit soars 38 pc on favourable Re, all-round growth

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A strong performance across sectors and a favourable rupee exchange rate helped the country's largest software exporter TCS post nearly 38 per cent jump in consolidated net profit at Rs 3,317.68 crore for the April- June period of this financial year.

The revenue also surged by 37.71 per cent to Rs 14,868.71 crore in the quarter under review, from Rs 10,797.02 crore in the year-ago period.

"We have seen strong, secular growth across all our service lines and industry segments driven by robust volumes from key markets like North America, Europe and the UK," TCS Chief Executive Officer and Managing Director N. Chandrasekaran told reporters here.

"We have also absorbed the impact of wage hikes and maintained our profitability in a volatile setting," he added.

TCS had posted a net profit of Rs 2,414.76 crore in April-June, 2011-12.

TCS earnings were in contrast to rival Infosys which earlier in the day reported about 33 per cent rise in Q1 profit to Rs 2,289 crore and cut its dollar revenue guidance amid a volatile global economic environment.

On operating margins, Chandrasekaran said, "This is the quarter in which we give wage increases and we had also applied for a significant number of visas, the visa fees also went up. Considering all that, we were able to mitigate any dip in operating margin and use the currency gains in mitigating that."

The company announced its results after the market hours and the investors' reaction would be seen on Thursday.

"TCS results were mixed with USD revenues coming in above expectations whereas EBIT margins came in marginally lower than what we had expected. The volume growth was 5.3 per cent and that was higher than that reported by Infosys," Kotak Securities Head of PCG Research Dipen Shah said.