The Hindu Business Line : TCS sees muted growth in next few quarters

Better cost management: Mr Ratan N. Tata (right), Chairman, Tata Consultancy Services, and Mr S. Ramadorai, CEO and Managing Director, at the company’s AGM in Mumbai on Tuesday. –

Our Bureau Mumbai, June 30 Tata Consultancy Services (TCS) expects muted growth in the next few quarters as the economic slowdown continues to crimp the outsourcing industry.

“Given the global economic situation, there is likely to be little or no growth in the coming times. Our view for the immediate future continues to be reasonably flat,” said Mr Ratan Tata, Chairman, TCS, at the company’s annual shareholders’ meeting here on Tuesday.

Tata Consultancy plans to protect its profit margins. “We have had some very aggressive means of cutting costs. Some staff have left; we have cut on travel and closed offices. The company has already decided not to give wage hikes this year,” said Mr Tata

The company plans to transfer more jobs to its low-cost facilities in India, Mr Tata said. The software firm has made offers to 24,000 trainees this year, of which 18,000 will be joining in batches.

For the current fiscal year, the company has chalked out a capital expenditure plan of Rs 1,300 crore.

In April, the company reported a seven per cent rise in its consolidated net profit for the quarter ended March 31. Net profit rose to Rs 1,333 crore from Rs 1,245 crore in the corresponding quarter last year.

“We don’t see the market moving in 2009. We are facing some pricing pressure, but it is much less than before,” said Mr S. Ramadorai, Chief Executive Officer and Managing Director, TCS.

Earlier this month, Mr S. Mahalingam, Chief Financial Officer, TCS, said the company aimed to prune its selling, general and marketing expenses to 19 per cent of its total earnings through better cost management and efficiency measures.