TCS sees FY revenue growth beating industry estimates

By Nivedita Bhattacharjee

MUMBAI (Reuters) - India's largest software services exporter Tata Consultancy Services posted a better than expected rise in net profit led by strong worldwide client spending and said it expected revenue growth in the year starting in April to top industry estimates.

TCS, which has been growing revenues faster than rivals Infosys Ltd and Wipro Ltd , will benefit from investments in newer digital technologies and automation, Chief Executive N. Chandrasekaran said.

"We have laid a strong foundation for growth in FY 16," Chandrasekaran said, adding that the company's revenue will likely beat an industry lobby group's estimates for the current fiscal year.

Exports by India's IT outsourcing sector are expected to rise 12-14 percent in the current fiscal year, according to the National Association of Software and Services Companies.

TCS, which posted a 30.7 percent fall in net profit for the fourth quarter due to a one-off bonus paid to employees, had in March warned that currency fluctuations would affect its operating margins by 40 basis points.

The dollar's biggest quarterly rise against other major currencies since 2008 has undermined sales of India's IT services firms in non-U.S. markets, including Europe, in what is already a seasonally slow period.

TCS, part of India's diversified Tata Group, makes about 18 percent of its revenue from Europe.

However, excluding the employee bonus payment of 26.28 billion rupees, TCS reported a net profit for the period of 57.73 billion rupees ($927.37 million). That was up 7.7 percent compared to the year-ago quarter helped by strong client spending in a seasonally slow period.

Analysts, on average, had expected the company to report profit of 54.15 billion rupees.

Shares in TCS, the largest company in India by market value, closed down 1.5 percent ahead of the results on Thursday, while the broader market closed 0.46 percent lower.

($1 = 62.2516 rupees)

(Writing by Aman Shah; Editing by Clara Ferreira Marques and Vincent Baby)