India’s largest information technology (IT) services firm Tata Consultancy Services is likely to report “sustained” growth numbers for the fourth quarter of 2016 financial year continuing the momentum from Q3. After second largest software exporter Infosys’ forecast for a sluggish growth in FY18 at 6.5 to 8.5 per cent, TCS commentary on business will indicate how the Indian IT industry sail through challenges such as protectionism, stricter visa norms in the US and automation.
TCS surprised the streets in October-December quarter with nearly 11 per cent growth in net profit to Rs 6,778 crore on a year-on-year basis and 2.9 per cent growth on a sequential basis. Revenues were up by 8.7 per cent at Rs 29,735 crore year-on-year and grew 1.5 per cent quarter-on-quarter.
Estimates of key brokerage firms suggest revenue growth of the company should range between 4.4 and 5.4 per cent year-on-year basis, while it is expected to grow between 1.5 to 2 per cent on sequential basis in Q4 in constant currency terms.
The industry will keenly watch the fourth quarter results of the company as Tata Sons Chairman N Chandrasekaran, in his previous avatar as chief executive officer and managing director at TCS, suggested revival of growth in third and fourth quarters after an “unusual” Q2. At a time when the large IT service providers are seeing a decline in traditional businesses and transition to digital technologies are not fast enough, TCS reported nearly 30 per cent growth in its technology business.
With the change of guard at the help TCS as Rajesh Gopinathan delivers his first quarterly results as the chief executive office.