MUMBAI: India's largest IT software services exporter Tata Consultancy Services  Tata Consultancy Services (TCS), posted a 23-percent rise in quarterly net profit, beating street forecasts, on rising demand for outsourcing services from western clients.

The software exporter said excellent execution, constant customer focus boosted the Q4 quarter numbers and added that markets in US and Europe was improving. Revenues jumped by 5.1% to Rs 10,157 crore in the quarter ended March 2011 as against Rs 9,663.4 crore in previous quarter.

The total income for FY11 increased to Rs 37,324.51 crore from Rs 30,028.92 crore in the financial year ended March 31, 2010. This signifies an increase of 24.30%. The income received a major boost from sale of equipment and software licences that reported an increase of nearly 35 per cent.

Within the income segment, banking, financial services and insurance (BFSI) contributed the largest share followed by telecom, retail & consumer packaged goods and manufacturing. Meanwhile, the company took a hit of Rs 36.23 crore on account of foreign exchange loss in FY11.

The board of the company has recommended a final dividend of Rs 8 on equity share of Re 1 each, which shall be paid on the fourth day from the conclusion of the annual general meeting, subject to the approval of the shareholders of the company.

Shares in TCS, valued at about $54 billion, have risen more than 4.6% this year, outpacing a 9% fall in the sector index and a near 5% drop in the broader market.

Board Speaks:

Talking to the press, N Chandrasekhar, CEO, TCS, said: We are exceeding the financial year with highest operating margin. Our annual operating margin has been at an all time high. We have delivered sequentially every quarter this year and in terms of the outlook, the demand will be robust. We are expecting to grow."

Talking about the overall recovery, he added that US and Europe markets are developing and the demand from these markets have improved. He told that discretionary spending has improved and clients are also not too apprehensive like earlier.

N Chandrasekaran said, however, headwinds remain in the near term and medium term global macro horizon.

The board said a 2-3% wage hike has been factored in the US markets and around 12-15% in India. They added 39 clients this quarter.

A detailed copy of the press release.

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