The nation's largest IT exporter TCS today reported a higher-than-expected 72.7 per cent growth in the March quarter net profit at Rs 6,413 crore and guided towards a stronger 2016-17 fiscal, saying a majority of its worries are behind now.
The biggest Tata Group company had posted a post-tax profit of Rs 3,713 crore in the year-ago period, pulled down by a Rs 2,628-crore employee bonus during the period.
"We believe that all these (difficult) markets are better than the curve we had in the earlier quarter. I think FY 2016-17 should be a good year...We can tell you that it would be a strong year," Managing Director and Chief Executive N Chandrasekaran told reporters here.
Industry body Nasscom expects software exports to grow at a slower clip of 10-12 per cent in FY 2016-17.
For FY 2015-16, its bottomline grew 22.4 per cent to 24,292 crore, while the topline jumped 14.8 per cent to Rs 1.08 trillion, crossing the trillion-rupee mark for the first time.
During the reporting quarter, TCS posted a 17.5 per cent rise in revenue to Rs 28,449 crore under the I-Gaap accounting, while on a sequential basis, it was up at a milder 4 per cent.
Chandrasekaran said all the regions where the company was facing headwinds such as Japan, Britain (because of its acquisition of Diligenta), and Latin America, and verticals like insurance, energy, utilities and telecom are either doing well or have hit the trough.
Even though its rivals have been flagging banking and finance sector as the potential areas to face headwinds, TCS' revenues from the segment grew 3.2 per cent sequentially and Chandrasekaran is confident it will continue to do well.
The TCS numbers come days after its rival Infosys reported better-than-expected 16 per cent jump in the March quarter net and gave a very strong revenue growth guidance for the current fiscal on new client additions.
In the run-up to the good set of numbers that beat market view, the TCS counter closed with a negative bias at Rs 2,522.40 on the BSE, as against a 0.74 per cent surge in the benchmark.
Sarabjit Kour Nangra of Angel Broking termed the numbers as better than expected but attributed the same to other income, which she did not elaborate on. "The better-than- expected net is on back of higher than expected other income," she said in a note.
With an 'Accumulate' call, it sees an over 13 per cent upside to the TCS counter in the mid to long term, she cited the company overcoming key headwinds from industries like energy and BFSIs have bottomed out and company given its client additions expects a strong FY 2016-17.
