Tata Consultancy Services Ltd (TCS) said it expects the demand for software services to continue to increase as customers adopt digital technologies at a rapid pace to ensure business continuity, indicating that growth is being helped rather than prevented by the coronavirus pandemic.
On Wednesday, India’s largest software services company reported a broad-based growth rebound across all industries and markets, reporting a 3% increase in revenue for ₹Rs 40,135 crore in the quarter to September. Revenues increased 4.7% over the previous three months.
“We believe that the recovery in demand has strong legs. We definitely do not see this as a demand for recovery, but rather a sustainable demand going forward, “said Rajesh Gopinathan, CEO and CEO. We were able to get back on track a room earlier than we had. expected and our confidence in H2 (the next two quarters) is much higher. “
In the September quarter, the firm reported a 4.9% growth in net income to ₹8,433 crore from a year ago. Sequentially, earnings rose a further 20.3%, but fell short of estimates, taking into account legal provisions announced earlier this week.
TCS was expected to report a profit of ₹7,754 crore in sales of ₹38,926 crore, according to 10 analysts surveyed by Bloomberg.
The company’s September quarter profit excludes ₹Rs 1,218 million provision for Epic Systems case.
In August, a U.S. appeals court upheld a $ 140 million damages award while leading the reassessment of $ 280 million punitive damages against TCS in a trade secret lawsuit filed by the company. American medical software Epic Systems.
TCS said its business segments such as cloud and security, analytics and cognitive business operations led the increase in future-focused discretionary investments for growth and transformation.
While the recovery in demand will continue, the administration warned of seasonal weakness during the December quarter due to the holiday season.
TCS’s board also approved on Wednesday an attractive cash gift for its shareholders, including parent company Tata Sons Ltd, which is seeking to mobilize resources to buy Shapoorji Pallonji group’s 18.4% stake in the Tata group’s holding company.
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TCS will spend ₹16,000 crore to buy back up to 53.3 million shares, representing 1.42% of the total paid-up share capital at a price of ₹3 billion rupees, a 10% premium to Wednesday’s closing share price.
TCS shares ended their trading at ₹2,737.4, 0.78% more than BSE.
Tata Sons, you need as much as ₹1.5 billion to fully buy the 18.4% stake of SP Group, is expected to get a big boost from ₹11,528 crore ($ 1.57 billion) from the buyback.
According to a person familiar with the group’s plans, Tata Sons is likely to be involved as much as possible in the buyback.
An email sent to Tata Sons received no response.
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