TCS shares hit new high after good Q2 results, Wipro slips

Mumbai: Tata Consultancy Services (TCS), the country's largest software services exporter, climbed to a new high in early trade today after the company's profit growth outpaced that of Infosys Technologies Ltd and Wipro Ltd. The stock price gained 5.8% to Rs1,043, the highest since the shares started trading in August 2004 after the company posted a more than 30% jump in quarterly net profit and said it expected strong demand for outsourcing towards the end of the year.

Wipro, the third-largest outsourcer, lost nearly 4% to Rs455 after it announced a 10% growth in Q2 profit, which was below market expectations. The stock price of Infosys - the second-largest exporter - gained up 1.6% to Rs3,084.

TCS yesterday announced a 32.1% jump in net profit at Rs2,169 crore in the quarter to September 2010 and a 24.9% growth in revenues year-on-year at Rs9,286 crore, reports PTI. "It has been a quarter of superior performance across the board, driven by volume growth of over 11%," N Chandrasekaran, managing director and CEO of TCS, said. "In uncertain economic conditions, our results are a milestone on the path to a strong demand recovery."

Mr Chandrasekaran said that the growth achieved in the past quarter makes the company positive about its outlook for global demand. He refuted pricing concerns, saying that the company expects pricing to rise towards the end of the year. Last week, Infosys also raised its guidance, suggesting an increase in corporate spending on information technology.

TCS added 30 new clients and won eight large deals, including five large deals from the US, in the second quarter. The company also saw significant deal closures across sectors and the deal pipeline is expected to be good, he said. 

All major markets grew in double-digit terms with Europe leading the pack. The company's North American revenues crossed $1 billion. All emerging markets also grew with India and APAC leading the pack. All grew registered double-digit growth, Mr Chandrasekaran said. "Given the growth we have achieved across all industry units, we are very positive about the global demand recovery going forward while being watchful in view of the macro environment."

The Tata group company sees discretionary spending by clients and expects an increase in clients' budgets next year. It also expects increase in IT spends by customers in FY12.

Mr Chandrasekaran pointed out to the appreciation of the rupee as a "big headwind" in the next quarter. The company reported a Rs47 crore foreign exchange loss in Q2. "With our major operating currencies continuing to be volatile, we remain vigilant on this front," S Mahalingam, chief financial officer of TCS, said.

During the quarter under review, TCS was granted two patents. Till date, the company has applied for 380 patents and has been granted 64 patents.




7 years ago

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Police arrests staff of microfinance cos on harassment charge

Hyderabad: The Andhra Pradesh Police today said it has arrested three people working with SKS Microfinance and Spandana on a complaint of harassment by a borrower and might book the companies' respective promoters Vikram Akula and Padmaja Reddy under a new ordinance to check coercive methods of loan recovery, reports PTI.

The borrower, Ammulu, filed the complaint with the Yemmiganur police station in Kurnool district, about 270 km from here, last night. A case was registered under Section 16 of the AP Microfinance Institutions (Regulation of Money Lending) Ordinance-2010 and three persons belonging to SKS and Spandana were arrested.

"After investigation we came to know that the recovery officials were acting under the instructions of their company management. So under the new ordinance Vikram Akula and Padmaja Reddy may also come into the case," CH Srikanth, Superintendent of Police (Kurnool) told PTI today.

This is the first case booked in the state under the new ordinance issued a week ago.

Section 16 of the ordinance says all persons connected with and responsible for the day-to-day control, business and management of a microfinance institution, including the partners, directors and the employees, who resort to any type of coercive measures against the self-help groups or its members, or their family members, shall be liable for punishment of imprisonment, which may extend up to a period of three years or with fine which may extend to one lakh rupees or with both.

According to Kurnool police, Ammulu borrowed a total of Rs70,000 from SKS and Spandana and later defaulted on payments.

"She has been avoiding the collections officials of the companies for the past two months. According to the complaint lodged with us she is being harassed by the company officials for the repayment. We inquired in to the matter and registered cases," Guna Sekhar, inspector of police, Yemmiganur, said.

He said a case has been also booked under Sections 341 (Punishment for wrongful restraint) of IPC and sections related to word, gesture or act intended to insult the modesty of a woman and punishment for criminal intimidation.

Arvind Rao, AP director general of police, said the department has been instructed to be strict on cases related to microfinance.

"We held video conference with the participation of all district SPs and commissioners of police and issued guidelines to book cases under the new ordinance," the DGP said.

The ordinance was aimed at regulating MFIs by making registration with the state compulsory and also disclosure of interest rate charged. The move came following reports of harassment of borrowers and also incidents of suicides although the companies denied that the suicides were unrelated to the loans.



Narendra Doshi

7 years ago

Excellent timely exposure. Keep continuous chase & we do hope at least some good results do come out at the end.

Rupee appreciation not abnormal: Pranab

Gyeongju (South Korea): Finance minister Pranab Mukherjee has said today that huge foreign institutional investor (FII) inflow reflects foreigners' confidence in the Indian growth story and is not a matter of concern as of now since the appreciation in the value of rupee is not abnormal, reports PTI.

"The rupee appreciation is not abnormal. As and when Reserve Bank of India (RBI) feels that intervention is necessary, they start intervening.

But I'm not very much worried because our situation will not be of that level," Mr Mukherjee said ahead of G-20 finance ministers meeting here.

RBI had intervened in markets last week to restrain a sharply appreciating rupee.

The finance minister said that if rupee continued to appreciate for longer, exports would be impacted.

"Export is definitely affected if it continues for a longer period of time," he said.

The Indian rupee has appreciated by around 5% this year so far, to stand at around Rs44.36 against a dollar.

The finance minister said FII inflows reflects momentum in growth of Indian economy.

"One of the reasons is that when the recovery process in industrial world is slow, naturally those who have investible resources would like to come to emerging markets and confidence of Indian economy has allured the investment," he said.

The Indian economy grew by 8.8% in the first quarter of this fiscal, while major countries in Europe and the US are struggling to revive from the global financial crisis.

FIIs have poured in record over Rs1 trillion in Indian stock markets in the current year so far.

Mr Mukherjee favoured dialogue to resolve the issues of currency war, particularly between US dollar and Chinese yuan, instead of confrontation.

He said he was not sure whether somebody will raise the issue at G-20 finance ministers meeting, and that India's stand would depend on how the issue was raised at the meeting.


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