TCS' FY13 biz growth to outpace industry average, says CFO

Nasscom had earlier predicted that Indian software firms' business growth will be close to 11%

Tata Consultancy Services (TCS), the largest software exporter in the country, is confident that its business growth in the current financial year will outpace the industry average.

Industry body Nasscom (National Association of Software and Services Companies) had earlier predicted that Indian software firms' business growth will be close to 11% in 2012-13 (April-March).

"We have demonstrated strong financial performance in the first two quarters. We continue to grow in this quarter also. We believe that our growth for this financial year will be better than NASSCOM's estimate," S Mahalingam, chief financial officer and executive director at TCS, told reporters here today.

Mahalingam said initial indications suggest that customers are not planning to cut technology budgets. He expects clients' information technology spends to remain stable. Typically, companies finalise their annual spends on technology by end of January.

TCS also expects its margin to remain at around 27%, which suggests that the software firm is not witnessing much pressure on bill rates. "It is our aspiration to remain at that level," Mahalingam said refusing to offer any further guidance on the company's financial performance for the rest of this financial year.

The software outsourcer closed July-September quarter with operating margin of 26.7% under Indian GAAP. It reported a net profit of Rs 3,434 crore on revenues of Rs 15,621 crore during this period.

Mahalingam said the company may incur a foreign exchange loss of around Rs 30-35 crore in the current October-December quarter because of fluctuations in the currency exchange rate. The company has taken a plain vanilla put option to hedge itself from adverse movements in currency exchange rate.

"As far as this year is concerned we had decided that we would protect the rate at 50, because at the beginning of the year the (rupee-dollar exchange) rate was around 49," Mahalingam said.