Tata Consultancy Services (TCS.NS), India's No.1 software services exporter, reported a slightly better-than-expected 16.8% rise in quarterly profit on Wednesday, helped by large order wins.
TCS is the first among its peers to report quarterly results, setting the tone for a $245 billion industry that is staring at a recession in major markets like the United States and Europe.
Rival HCLTech (HCLT.NS) was also due to report results on Wednesday.
Consolidated net profit for TCS rose to 110.74 billion rupees ($1.35 billion) in the first quarter ended June 30, from 94.78 billion rupees in the year-ago period.
Analysts on average had expected a profit of 109.04 billion rupees, according to Refinitiv IBES data.
Revenue from operations rose 12.6% to 593.81 billion rupees.
TCS said its order book for the April-June period stood at $10.2 billion - higher than the $8.2 billion worth of deals it signed a year ago and ahead of its own view of $7-$9 billion for the quarter.
"We continue to see demand stability ... with recent indications (funding for large deal flow, uptick in demand for lateral hires) as proxy for growth pick-up in the second half of the year," Wedbush Securities analyst Moshe Katri said in a note.
The order wins, which include a $1.1 billion contract with British pension scheme Nest, come at a time when IT clients are cutting discretionary spends amid high interest rates and inflationary pressures.
Last month, larger rival Accenture fanned concerns about dwindling IT spending and forecast quarterly revenue below Wall Street estimates.
Operating margins for TCS stood at 23.2%, mostly flat from a year ago, as the company rolled out its annual salary increase from which it saw a 200-basis-points hit.
The results also came amid a leadership change at the IT firm, with K Krithivasan taking over as the new CEO on June 1, replacing Rajesh Gopinathan, who resigned in March.
($1 = 82.2658 Indian rupees)
