BENGALURU (Reuters) – India’s Tata Consultancy Services reported lower-than-expected first-quarter revenue on Thursday as clients remained cautious about discretionary spending amid tariff-related uncertainty.
Consolidated sales at India’s largest IT services firm by revenue rose 1.3% year-on-year to 634.37 billion rupees ($7.40 billion) in the June quarter.
Analysts, on average, expected 646.66 billion rupees, as per data compiled by LSEG.
Revenue is the key metric that analysts and market participants look at in the Indian IT sector as most companies provide annual revenue growth forecasts.
Uncertainty around U.S. tariffs has quashed IT companies’ hopes of a revival in client confidence and spending in its biggest market. A survey in May showed two in five tech executives had deferred discretionary projects.
“The continued global macro-economic and geo-political uncertainties caused a demand contraction,” said TCS CEO K Krithivasan.
Last month, IT bellwether Accenture’s shares dropped as much as 6% after it reported tepid deal-booking numbers in its quarterly results.
A slowdown in state-owned BSNL’s contribution, as the telecom company’s $1.83 billion deal nears completion, also dented revenue for TCS, according to analysts.
TCS’s total order bookings stood at $9.4 billion during the quarter, from $12.2 billion in the previous quarter and $8.3 billion in the year-ago period.
Its net profit rose 6% in three-month period to 127.60 billion rupees. Analysts had expected a profit of 122.16 billion rupees, as per data compiled by LSEG.
TCS is the first Indian tech major to report results. Rival HCLTech reports next week, with Infosys following suit on the week after.
Its shares listed in Mumbai closed 0.1% lower ahead of the results.
($1 = 85.6690 Indian rupees)
(Reporting by Sai Ishwarbharath B and Haripriya Suresh; Editing by Janane Venkatraman and Mrigank Dhaniwala)
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