Tata Consultancy Surges as Profit Beats Estimates: Mumbai Mover
Tata Consultancy jumped as much as 4.9 percent and was headed for the largest increase since April 24. It was the biggest gainer on the BSE India Sensitive Index, which surpassed 20,000 for the first time in more than two years.
Net income surged 23 percent to 35.5 billion rupees ($652 million) in the three months ended December, beating the 34 billion-rupee median of 38 analyst estimates compiled by Bloomberg. Tata Consultancy, which won orders from clients including an Asian bank and Mexico’s government, is “very confident” about the outlook for the year starting April 1 because of a strong deal pipeline and signs of demand recovery in Europe, Chief Executive Officer N. Chandrasekaran said.
“TCS is clearly doing better than its competitors, largely because they’ve gone aggressively into developing markets,” said Atul Thakkar, an analyst with Mumbai-based Anand Rathi Financial Services. Shares in the Indian information-technology industry could trade at “historic highs” over the next two quarters, he said.
Smaller rival Infosys Ltd. (INFO) declined 0.6 percent to 2,790.15 rupees. The stock has jumped 20 percent since the company raised its full-year sales forecast on Jan. 11.
Tata Consultancy yesterday proposed an interim dividend of 3 rupees, the same as a year earlier. Third-quarter sales rose 22 percent to 160.7 billion rupees.
“We expect the good momentum to continue,” Chandrasekaran said. “The environment is good.”
The company added two clients with contracts valued at more than $100 million each in the quarter, boosting the tally of such customers to 16, it said in a statement yesterday. Total active customers reached 1,051 at the end of December.
Major order wins in the last quarter included a large service-management deal with a global financial services company in the U.S. and a multimillion-dollar contract from a North American health-care provider, the company said.
Tata Consultancy added a net 9,561 employees in the quarter, lifting the tally since April 1 to almost 50,000, according to the statement.
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