Digital Demand, Banks Help Tata Consultancy Beat Profit Estimateby
Revenue from providing digital services rose to $2.3 billion
Sales, profit for the fourth quarter beat analyst estimates
Tata Consultancy Services Ltd.., Asia’s largest software services exporter, reported profit for the fourth quarter that beat analyst estimates as it won new contracts from banks and healthcare providers.
Net income rose to 63.4 billion rupees ($952 million) in the three months ended March, the Mumbai-based company said Monday. That compares with the 62.8 billion-rupee average of estimates compiled by Bloomberg. It reported sales of 284.5 billion rupees, while analysts had projected 283 billion rupees.
Tata Consultancy is betting on rising demand from clients to use handheld devices for daily workplace tasks, prompting Chief Executive Officer Natarajan Chandrasekaran to boost expansion into cloud computing and analytics. The company is facing new challenges in the U.S. amid tighter visa rules and the impact of currency moves while it’s also appealing a near $1 billion fine in an intellectual-property infringement case.
“Digital has shown strong growth and will be a very key sector,” Chandrasekaran said at a briefing in Mumbai. “It’s the future.”
Tata Consultancy, the unit of India’s biggest conglomerate, said revenue from digital services rose to $2.3 billion in the year ending March 31. It said it won a contract from an Indian bank to enable its customers transact using social media and help a global port operator monitor equipment on a real-time basis.
Infosys Ltd. on Friday forecast better-than-expected sales growth this fiscal year, as it sustained momentum on contract wins with investments in artificial intelligence and systems automation.
Shares of Tata Consultancy fell 0.3 percent to 2,519.75 rupees before the earnings were announced, compared with a 0.7 percent rise in the benchmark S&P BSE Sensex.
A federal jury in Madison, Wisconsin, found that Tata Consultancy and Tata America International Corp. should pay $940 million for using data from Epic Systems without permission, according to a verdict handed down on April 15.
The company will defend itself “vigorously in appeals to higher courts,” Tata Consultancy said, adding that it didn’t misuse or derive any benefit from documents downloaded from Epic System’s user Web portal.
Profit for the year ended March 31 rose 23 percent to 242.2 billion rupees while revenue increased 15 percent to 1 trillion rupees, Tata Consultancy said.