India's TCS beats fourth quarter view as North America holds up


A man walks past a logo of Tata Consultancy Services (TCS) before a press conference in Mumbai, India, January 11, 2024. REUTERS/Francis Mascarenhas

BENGALURU, April 9 (Reuters) - India's ⁠top software services exporter Tata Consultancy Services beat profit and ⁠revenue estimates for the fourth quarter on Thursday, helped by ‌strength in its North American market and a falling domestic currency.

Sales for the quarter rose 9.7% to 706.98 billion rupees ($7.63 billion), while net profit was up 12.2% to ​137.18 billion rupees ($1.48 billion).

Analysts, on average, were ⁠expecting sales of 694.94 billion ⁠rupees and net profit of 136.46 billion rupees, as per data ⁠compiled ‌by LSEG.

The company is the first major Indian IT company to report fourth-quarter results. Rivals Infosys and HCLTech are set ⁠to report later this month.

Software services firms bill ​in foreign currencies ‌but incur most costs in rupees, benefiting when dollar earnings are ⁠converted.

Revenue from ​its North American market, from which the company derives nearly half of its revenue, grew by 2.5%.

"While the macroeconomic headwinds continue, we see sustained customer ⁠conviction in technology investments, which positions us ​well for the opportunities ahead," chief executive K Krithivasan said in a statement.

Annualised AI revenue - a key measure analysts were looking at for growth - ⁠crossed $2.3 billion in the fourth quarter, the company said, up from the $1.8 billion last quarter.

Two analysts said revenue growth at TCS' banking and financial services was "muted".

The segment, TCS' biggest revenue driver, grew 0.4%. Segment ​growth was led by life sciences and ⁠manufacturing, up 3.3% and 3.1% respectively.

TCS' order book for the quarter stood ​at $12 billion, up from $9.3 billion in the ‌third quarter and down from $12.2 billion ​in the year-ago period.

($1 = 92.6575 Indian rupees)

(Reporting by Haripriya Suresh and Sai Ishwarbharath B in Bengaluru; Editing by Nivedita Bhattacharjee)

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