TCS confident of growth despite EU, US concerns

Country's largest software exporter Tata Consultancy Services (TCS) today exuded confidence that it would maintain the growth momentum in the face of European debt crisis and high unemployment in the US, but cautioned on the market conditions in the coming months.

"We think the environment is good in spite of the macro economic uncertainty in different parts of the world. Some of the countries are failing in Europe and there is the issue of unemployment in the US, but still I think customers are going with their plans as they had originally intended," TCS CEO and MD N Chandrasekaran told reporters here.

As long as the company is able to work with customers and stay close to them, "we will be able to deliver a good growth, capture the growth and make a difference", he added.

TCS business in Europe has seen double-digit growth, and other markets have also witnessed a strong momentum, Chandrasekaran said.

On average, the $60 billion Indian IT software industry -- including leaders, TCS and Infosys -- gets over 80% of revenues from the US and Europe.

However, he added that it was important to be vigilant of the market conditions as well.

"What we are hearing from the clients and businesses so far, I don't have any negative view. Customers are on track with their plans, but macro economic news [also] keeps coming in. So we will have to be vigilant and keep watching and try to look for any signals in terms of if there is anything negative," Chandrasekaran said.

The country's second-largest exporter and TCS rival, Infosys had warned of a volatile global economy leading to slower client spending while announcing Q1 results. TCS, on the other hand, had said it expects to see steady demand for its services by being 'agile'.

TCS had posted a 26.7% rise in its consolidated net profit, year-on-year, at Rs 2,415 crore for Q1 FY12, in contrast to Infosys' 15.72% jump in consolidated net profit to Rs 1,722 crore.

Talking about the deal pipeline, Chandrasekaran said, "It is well distributed. Some are large transformation deals, coming from the discretionary budget. Those are big positives from the quarter."