TCS thrives, Infosys slumps
Mumbai/Bangalore, PTI: In a tale of contrasting fortunes of country's two biggest IT companies, TCS on Thursday reported 38 per cent surge in profit exceeding market expectations on favourable rupee while Infosys's 33 per cent rise was way below estimates.
While TCS continued to maintain its optimism to outgrow the industry in the rest of the year, Infosys -- which has for the past two-three quarters struggled to beat its own guidance -- chose to scale down its FY2013 outlook saying the global macro environment is cloudy and challenging.
Investors' woes were compounded with the Bangalore- headquartered firm skipping a quarterly guidance (for July-September quarter) for the first time in its history.
Commenting on the divergence, IT research company Garnter said, "the results reaffirm the fact that company-specific issues continue to plague the performance of Infosys, while the underlying health of the market was confirmed by TCS earnings."
Infosys' weak numbers dragged down the stock market with BSE benchmark Sensex taking a hit of 257 points. Infosys shares slumped 8 per cent and the sentiment was so poor that the insipid Infosys earnings and outlook had a cascading effect on peer stocks, including TCS that feel 1.80 per cent.
Infosys MD and CEO S D Shibulal said in Bangalore, "We lost USD 13 million because of currency and we also took a one time write-off (of USD 15 million) in accrued revenue as a matter of prudence on a large transformational programme which got cancelled this quarter in Europe."
However, TCS Chief Executive Officer and Managing Director N Chandrasekaran was upbeat.
"We have seen strong, secular growth across all our service lines and industry segments driven by robust volumes from key markets like North America, Europe and the UK," he said in Mumbai.