By Sai Ishwarbharath B and Haripriya Suresh
BENGALURU/MUMBAI (Reuters) -India’s No. 1 software services exporter Tata Consultancy Services (TCS) said on Thursday it is betting on Donald Trump’s regime to revive client confidence and discretionary spending in North America.
The comments came after the leader of the $254 billion Indian IT sector reported a decline in North American revenue for the fifth-straight quarter.
“Once the new (U.S.) administration comes in, it will remove any policy uncertainty,” TCS CEO K Krithivasan said in a post-earnings press conference.
Pointing also to a higher order book, Krithivasan said: “All of this together, we see more confidence in discretionary programmes in the coming years.”
The Mumbai-based company also declared a special dividend of 66 rupees ($0.7691) per share.
Consolidated revenue at the Tata Group firm rose 5.6% to 639.73 billion rupees in the October-December quarter, but missed analysts’ average estimate of 644.52 billion rupees, according to data compiled by LSEG.
TCS’ quarterly net profit rose 12% to 123.80 billion rupees, against analysts’ mean estimate of 123.99 billion rupees.
“Revenue growth was below expectations but the third quarter is a seasonally weak one as most clients ramp down operations due to the holiday season,” said Piyush Pandey, analyst at Centrum Broking.
Pandey, however, highlighted deal wins and operating margin improvement as “positives” that may aid a turnaround in the United States in the coming quarters.
India’s IT services industry has been facing a growth slowdown over the last couple of years due to clients in the U.S. and Europe cutting down on tech spending amid economic pressures.
The company’s total order book stood at $10.2 billion in the quarter, compared with $8.6 billion in the previous quarter and $8.1 billion in the year-ago period.
TCS is the first major IT firm to report numbers in the current earnings cycle. Smaller rivals Infosys, HCLTech, Wipro will report next week.
The Mumbai-listed shares closed 1.7% lower ahead of the results.
($1 = 85.8420 Indian rupees)
(Reporting by Sai Ishwarbharath B. Editing by Eileen Soreng, Dhanya Skariachan and Mark Potter)
