Tata Consultancy Services reported fiscal third-quarter numbers roughly in line with street expectations for the three months ending Dececember 31, 2017, helped not only by a pickup in the USA, its largest market, but strong traction in Europe and the company's growing ability to land larger contracts in digital services. The company is expected to report profit for the quarter at Rs 3,609 crore, down 3.14 percent compared to Rs 3,726 crore in previous quarter, according to average of estimates of analysts polled by CNBC-TV18.
TCS is ramping up its digital investments and has signed its first $50-million deal this quarter.
Led by the gain in the stock, the companys market valuation rose by Rs 18,884.67 crore to Rs 5,37,359.67 crore.
The agreement means that M&S' "core supplier services will transfer directly to TCS and the day-to-day relationship and project management of specialist suppliers will move under the control of TCS", the retailer announced.
Other segments such as energy and utilities also performed well. The majority of these charges are expected to be recorded over the first three years of the agreement, with approximately United States dollars 100 million of transition and conversion charges reflected in the first half of 2018.
Digital revenue, which formed 22.1 per cent of total revenue for the quarter, was up 39.6 per cent year-on-year and up 13.9 per cent quarter-on-quarter.
"TCS will provide valuable administration and quality customer service, and Transamerica will continue to engage with our customers, clients and advisors in the most meaningful ways to them by utilising our digital engagement platforms and developing new solutions that help people save, protect, invest and retire", Mark Mullin, Transamerica President and CEO, said.
In dollar terms under the International Financial Reporting Standards, net income at $1,012 million is 1.2 per cent up annually and 1.1 per cent up quarterly, while revenue grew 9.1 per cent annually but flat (1 per cent) quarterly at $4,787 million.
"We don't see any significant tailwind in cross-currency to support the topline growth and margins for tier-1 companies".
The agreement, a multi-year partnership with more than Dollars 2 billion of revenues to TCS, is expected to be completed by the second quarter 2018.
Gopinathan added, "As lagging parts of our portfolio turn around, and areas of softness reduce, we are well placed for stronger growth".
The shares also quoted a high of Rs 2,820.10 and a low of Rs 2,781.90 during the intra-trading sessions on the BSE.