Tata Consultancy Services (TCS) posted a near 14% drop in first-quarter profit that also missed estimates, as the COVID-19 pandemic forced its clients to cut spending on IT services.
TCS, India’s largest IT exporter, is the first among its peers to report earnings in what is expected to be one of the worst quarters for the sector due to the pandemic.
However, the company’s Chief Executive Rajesh Gopinathan said in a statement he believed that the impact from the pandemic had “bottomed out”.
TCS’ banking, financial services and insurance segment (BFSI) was the only large business division to report a modest 2% increase in revenue to Rs 152.82 billion in the three months to June, while revenue in most other segments fell.
The company said net profit for the quarter fell 13.8% year-on-year to Rs 70.08 billion ($934.94 million). Analysts’ on average had expected a profit of Rs 77.05 billion, according to Refinitiv data.
Overall, revenue rose marginally to Rs 383.22 billion from Rs 381.72 billion a year ago.
Shares of the company closed down 0.66% in a broader market that rose about 1% before the results were announced.
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