The country’s largest software services exporter, Tata Consultancy Services (TCS), exceeded analyst expectations on revenue growth during the quarter ended June 30 but disappointed on profit growth.

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At `10,797 crore, revenues were up 6.3% over the previous quarter, while net profit fell 7.9% to `2,415 crore, as per Indian accounting practices.

Year on year, revenues were up 31.4% and profits 26.7%.During the quarter, revenues were driven by robust demand for information technology services in North American and emerging markets. However, profits were hurt by the 12-14% wage hikes handed out in April, among the highest in the industry. The profits included foreign exchange gains of `79 crore, as against a forex loss of `11 crore in the earlier quarter.

Interestingly, even as it recorded a fall in profit, TCS matched Infosys —- so far the industry bellwether —- in operating profit margin, which stood at 26.1% for both. This is the first time TCS has been able to match Infosys in profit margins.

Bangalore-based Infosys, which is currently in a transition phase as it implements some organisational restructuring to improve efficiency, has seen operating profit margin erosion over the last couple of quarters.

“From here, the margins will improve,” N Chandrasekaran, chief executive officer, said, referring to the absence of headwinds like higher wages in the quarters ahead.

The company, though, is yet to see any material rise in pricing —- rates it charges its clients for services rendered.

At a time when sector analysts and industry observers are flagging the possible negative fallouts from ongoing macro-economic volatility in markets like Europe and North America, the TCS management said it has not seen anything negative in terms of business momentum.

“Of the 10 large deals signed during the quarter, four were from North America, one each from Europe and the UK,” Chandrasekaran said, implying that the macro environmental challenges such as high unemployment and shaky recovery in the US, or sovereign debt crisis in Europe are yet to have any effect on the company’s operations.   “The confidence one sees in the management commentary from TCS is very different from the caution that you see in Infosys, and if anything, that must be indicative of TCS’ confidence in dealing with a volatile environment,” said Amneet Singh, vice president, global sourcing at outsourcing advisory Everest Research.

“Clients have realised that the volatility is something that they have to learn to live with and that it is not going to go away very soon,” the TCS CEO said.

TCS added as many as 24 new clients during the quarter, of which 10 could be considered large accounts, according to the management.

“The latest set of numbers from TCS further widened the divergence in the performance between TCS and the rest and clearly marks them as the leader of the pack on all matrices,” said Ajay Parmar, head of equities research at Mumbai-based  brokerage Emkay Global Financial Services.

Further, the hiring guidance given by TCS shows its confidence in continuing demand momentum, Parmar said.

TCS expects to hire between 17,000 and 20,000 fresh engineering graduates during the current quarter. The company’s full-year hiring guidance of 60,000 has been maintained.

Even as its employee base touched 202,190, TCS managed an utilisation rate —- proportion of engineers assigned to billable projects —- of 83.2% during the quarter.