MUMBAI (NewsRise) -- Tata Consultancy Services, India's largest software exporter, said it is confident of returning to double-digit revenue growth this year on the back of strong deal wins in recent months amid signs of a recovery in its financial services business.
"Our deal flow, deal wins, and the market outlook that we see gives us confidence that we are well positioned to deliver on the trajectory of double-digit (revenue) growth," Chief Executive Rajesh Gopinathan told reporters at a news conference in Mumbai.
Revenue grew 8.6% to $19.1 billion in the fiscal year ended in March, the company said in a statement. Net profit for the quarter ended March stood at 69.04 billion rupees ($1.05 billion), compared with 66.08 billion rupees a year earlier. Revenue in the quarter grew 8.2% to 320.75 billion rupees. Analysts were expecting the company to report a net profit of 68.12 billion rupees, according to a Reuters poll.
Gopinathan said strong demand in digital businesses and large deals have made this "one of our best fourth quarters in recent years." "The strong exit allows us to start the new fiscal on a confident note."
Gopinathan's confidence draws from the string of large deals TCS bagged over the past few months, including a $2.3 billion contract from television rating measurement firm AC Nielsen in December and a $2 billion contract from American insurer Transamerica in January.
Signs of a turnaround are visible in India's outsourcing market that has been grappling with lackluster financial performances amid a shift in spending by clients to new digital technologies.
India's outsourcing companies earn a bulk of their revenue from rudimentary services such as maintaining the clients' software infrastructure and running back-office centers for large multinational companies. The advent of new technologies such as cloud computing and artificial intelligence has squeezed the investments in such low-margin, labor-intensive outsourcing services.
Digital revenue now accounts for 24% TCS's overall revenue.
Further, over the past few quarters, the industry has been facing a slowdown in investments from banking and financial services clients in the U.S. that account for a major share of the revenue of Indian software companies. The impact of the slowdown was amplified for TCS, which earned roughly a third of its revenue from financial services business.
However, Chief Operating Officer N. Ganapathy Subramaniam said the slowdown in financial services has "bottomed out."
"We are seeing some green shoots in banking and financial services in North America," Subramaniam said. "We should see growth in the coming quarters."
TCS' optimism resonates with the comments of smaller rival Infosys, which last week reported fourth-quarter net profit that met expectations. Infosys also said the outlook for outsourcing demand is showing signs of stability.
TCS offered one bonus share for each held by its shareholders. Third-ranked Wipro is set to report fourth-quarter earnings on Wednesday.
Ahead of the earnings, TCS shares gained 1% in Mumbai trading, while the benchmark S&P BSE Sensex closed 0.3% higher.
--Dhanya Ann Thoppil