IT shares in demand after TCS' good Q1 results

Nine IT shares rose by 0.55% to 3.28% at 9:35 IST on BSE after sector major TCS reported encouraging Q1 June 2013 results.

TCS (up 3.28%), Hexaware Technologies (up 3.13%), HCL Technologies (up 2.53%), Tech Mahindra (up 1.71%), CMC (up 1.67%), Infosys (up 1.66%), Wipro (up 1.17%), Oracle Financial Services Software (up 0.77%) and MphasiS (up 0.55%), edged higher.

The S&P BSE IT index was up 2.15% at 7,051.69. IT outperformed the BSE Sensex, which was up 0.26% at 20,179.91.

The S&P BSE IT index had outperformed the market over the past one month till 18 July 2013, rising 13.68% compared with the Sensex's 4.71% rise. The index had outperformed the market in past one quarter, rising 17.01% as against Sensex's 5.85% rise.

TCS announced after trading hours on Thursday, 18 July 2013, that its consolidated net profit rose 5.9% to Rs 3831 crore on 9.5% growth in revenue to Rs 17987 crore in Q1 June 2013 over Q4 March 2013.

Consolidated operating profit rose 12% to Rs 4847 crore in Q1 June 2013 over Q4 March 2013.

TCS said growth in Q1 June 2013 was seen across all industry segments, led by life sciences, retail, telecom and BFSI. There was balanced growth across IT and other service lines led by Assurance, EiS, Global Consulting and Asset Leveraged Solutions. Major markets grew smartly led by USA, Europe and UK alongside growth in emerging markets like Latin America and Asia Pacific, TCS said in a statement. The company added two new $100 million clients in Q1 June 2013.

Commenting on the Q1 performance, TCS Chief Executive Officer and Managing Director N Chandrasekaran said: "We have delivered another solid quarter, driven by the highest volume growth in the past seven quarters. It has been an all-round performance with strong revenue growth across markets led by the US. Our investments in Europe continue to gain strong traction with customers and helped us deliver industry-leading growth this quarter. Strong momentum in our business, the right cost structure, a customer-centric approach and our increasing investments in new digital solutions and services positions us well to post another year of strong business growth".

TCS Chief Financial Officer Rajesh Gopinathan said: "The current environment demands an agile operating model that can capture diverse growth opportunities. We continue to execute to plan and invest for growth, while maintaining stability in our margin profile".

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