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Infosys Q1 net profit up 32%, TCS 38%

Infosys Q1 net profit up 32%, TCS 38%
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Infosys on Thursday reported a 32.92 per cent jump in net profit to Rs 2,289 crore in the first quarter, but failed to enthuse the market due to sharp cut in dollar revenue guidance amid a volatile global economic environment.

Its revenue was up 28.47 per cent to Rs 9,616 crore in the first quarter of current fiscal, but in dollar terms the growth was just 4.8 per cent at $1,752 million.

While the company exceeded its revenues forecast in rupee terms, it failed to meet dollar revenue guidance of $1,771 - 1,789 million for the quarter. The company's net profit had stood at Rs 1,722 crore in the April-June quarter of 2011-12.

The street did anticipate Infosys to revise its FY'13 revenue outlook downwards, but the sharp reduction to five per cent as against growth estimates of 8-10 per cent sent the scrip tumbling 8.27 per cent to Rs 2,262 at the BSE in late afternoon trade.

The company attributed the revision to cross currency fluctuation and current business environment. The outlook is much weaker than industry body Nasscom's estimate of 11-14 per cent growth for the sector in FY'13.

‘We lost $13 million because of currency and we also took a one time write-off [of $15 million] in accrued revenue as a matter of prudence on a large transformational programme which got cancelled this quarter in Europe. This is a one time event and the client is still with us,’ Infosys MD and CEO S D Shibulal added.

Infosys said for now it is suspending the practice of giving guidance citing ‘lack of clarity’ in the demand environment.

A strong performance across sectors and a favourable rupee exchange rate helped TCS post nearly 38 per cent jump in consolidated net profit at Rs 3,317.68 crore for the April- June period of this financial year. The revenue also surged by 37.71 per cent to Rs 14,868.71 crore in the quarter under review, from Rs 10,797.02 crore in the year-ago period.

‘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,’ TCS chief executive officer and managing director N Chandrasekaran told reporters here.

‘We have also absorbed the impact of wage hikes and maintained our profitability in a volatile setting,’ he said on Thursday.
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