IT sector starts Q3 on positive note; TCS, Infy bullish
With demand improving and new deals flowing in, Indian IT companies have started the third qarter earning season on a good note, indicating that the sctor is coming out of financial meltdown last year.
New Delhi: With demand improving and new deals flowing in, Indian IT companies have started the third qarter earning season on a good note, indicating that the sctor is coming out of woods after being hit hard by the global financial meltdown last year.
The country`s largest software exporter TCS, which posted better than expected profit during the October-December quarter, said it saw continued demand for outsourcing services from the US, the key offshore market.
"While the US continues to lead demand recovery, the UK and European firms are increasingly beginning to invest for the upturn. The Asia-Pacific and India are also seeing strongdemand driven by growth in sectors like energy, utilities and Banking, Financial Services and Insurance (BFSI)," TCS Chief Executive Officer and Managing Director Chandrasekaran had said.
TCS on January 15, clocked 33 per cent jump inconsolidated net profit at Rs 1,823.90 crore for the third quarter of 2009-10 compared to Rs 1,362.06 in the same period last year.
Indicating a recovery, Infosys had also raised its annual sales forecast after announcing its quarterly results last week.
"We are seeing the benefit of recovery and the worst seems to be behind us...Even though IT budgets are expected to be flat in 2010, offshore outsourcing is expected to benefit from this recovery," Infosys Chief Executive Officer Kris Gopalakrishnan said after announcing its results.
Infosys Technologies had reported 3.6 per cent decline in consolidated net profit at Rs 1,582 crore for the third quarter ended December 31, 2009.
Analysts feel things are better this year. The numbers posted by the IT firms indicate that deals are back and the overall business environment has eased.
IT solutions provider NIIT Technologies, which has more than doubled its net profit at Rs 35.3 crore during the quarter ended December 31, 2009, said the business environment has improved compared to the same period last year when the meltdown had started.
NIIT Technologies CEO Arvind Thakur feels the worst is behind. "Going forward, there may not be an increase in the IT budgets but definitely there will be an increase in
outsourcing," he said.