India software giant TCS warns of market weakness

India's biggest outsourcer Tata Consultancy Services warned Friday of "weakness" in global markets, marking the latest downbeat comment to emerge from the country's flagship software industry.

In the March-ended quarter, TCS beat analysts forecasts with a 23 percent rise in net profit, and gave a relatively optimistic outlook.

But its rivals Infosys and Wipro gave muted forecasts, warning of a tough year ahead due to global uncertainty and the growing anti-outsourcing sentiment in the United States.

"There is weakness in multiple markets, both developed and developing," TCS chief executive N. Chandrasekaran told the annual general meeting of the company which is due to report its first-quarter earnings next month.

"The global business environment will be volatile and recovery a prolonged exercise," said Chandrasekaran.

The TCS chief gave no direct comment about the outlook for the quarterly earnings of the company, which is part of the steel-to-tea Tata conglomerate.

But analysts are not too optimistic about the performance of India's outsourcing firms for the quarter which ends on June 30.

"Management commentary from India's IT firms in the run up to April-June results has failed to enthuse," said Bhuvnesh Singh of Barclays Capital.

"The business outlook has not deteriorated but the macro-economic environment remains muddled, with the ambiguity on order inflows likely to continue into the end of the year," he said in a note to clients.

India's IT firms, including TCS, have expanded beyond the traditional main markets of United States and Europe, into newer markets like Latin America, Africa and China to boost revenues.

The National Association of Software and Services Companies (NASSCOM) has said exports by the sector are expected to increase by up to 14 percent to $78 billion in the fiscal year that began April 1.

However, some analysts have said that the forecast is too optimistic.

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Ayungin dilemma Ramon Casiple - Parallaxis
    Ayungin dilemma

    China faces a dilemma in Ayungin Shoal and other contested areas. If it waits for the ITLOS—which may decide against it—it would have tacitly bound itself to UNCLOS and risk a rogue state reputation if it asserts its claim in the South China Sea. If its militarily acts now, it may face international isolation. …

  • 48 nabbed in biggest anti-trafficking catch in Bongao VERA Files - The Inbox
    48 nabbed in biggest anti-trafficking catch in Bongao

    By Jake Soriano, VERA Files Bongao, Tawi-tawi—A team of Marines and policemen intercepted around noon Thursday 48 people, 12 of them minors, believed recruited by a human trafficking syndicate for work in Malaysia. The arrest constitutes what advocates called the … Continue reading → …

  • Docs vow to pay right taxes, make peace with BIR VERA Files - The Inbox
    Docs vow to pay right taxes, make peace with BIR

    By Kiersnerr Gerwin Tacadena, VERA Files Leaders of the medical profession have made peace with their former adversary, the Bureau of Internal Revenue (BIR), and joined forces in a campaign to get doctors to pay the right taxes. BIR Commissioner … Continue reading → …

POLL
Loading...
Poll Choice Options