India's TCS reports higher profit as remote work drives cloud demand

BENGALURU: Tata Consultancy Services (TCS) on Friday reported a 7.2% jump in its profit for the final quarter of 2020, as India's top software services firm benefited from greater demand for its cloud services during the COVID-19 pandemic.

The results kick off India's corporate earnings season for the December-quarter, a seasonally weak period for the software industry, but one which analysts reckon has been good for IT firms in 2020 thanks in part to the COVID-19 crisis.

TCS and rivals, Infosys and Wipro, have been winning more large contracts from businesses that are investing in services such as cloud-computing and cybersecurity to support their shift to remote work.

"Growing demand for core transformation services ... have driven a powerful momentum that helped us overcome seasonal headwinds," TCS Chief Executive Officer Rajesh Gopinathan said in a statement to the stock exchanges.

The Mumbai-based company said revenue from the banking and finance industries, its top revenue contributor, jumped 7.6% year-over-year to 166.55 billion rupees ($2.27 billion) in the December-quarter.

TCS' net profit rose to 87.01 billion rupees in the three months to Dec. 31, 2020, from 81.18 billion rupees a year earlier. Analysts on average had expected a profit of 84.01 billion rupees, according to Refinitiv data.

Revenue from operations jumped 5.4% to 420.15 billion rupees.