The country’s largest software services exporter, Tata Consultancy Services (TCS) on Tuesday missed analysts’ estimates on both the profit and revenue front with negative growth in the BFSI and retail segments. The company, which does not give a guidance, said FY18 should be incrementally positive as it expects BFSI or banking, financial services and insurance to bounce back, but retail would continue to be volatile.
During the quarter, net profit fell 2.5% sequentially to ` 6,608 crore, while revenues declined 0.3% to `29,642 crore. Bloomberg estimates on net profit were `6,654 crore and revenues `29,893 crore. However, revenue in dollar terms increased 1.5% to $4,452 million compared with the preceding quarter and grew 1% in constant currency terms.
TCS lost 1.3% in revenue and 40 basis points in margin during Q4 due to currency fluctuation, Rajesh Gopinathan, CEO and MD, said at a post-earnings press conference. He added that constant currency revenue growth would have been 3.4% if BFSI and retail are excluded.
“BFSI had negative growth due to cyclical factors and retail industry has been facing structural challenges but we see strong traction in BFSI and expect it to bounce back strongly from cyclic lows in 2018,” Gopinathan said, adding that retail was expected to to remain volatile and soft during the current year as well.
“We see FY18 as incrementally positive and (are) quite confident about the demand outlook that we see,” he added.
Revenue from its BFSI segment fell 1.6% sequentially to `11,828 crore while retail and consumer business revenue declined 2.9% to `4,993 crore during the quarter.
The H-1B visa system has been criticised following high-profile examples of American workers being replaced by lower-paid foreigners through the programme.
The new order asks agencies to propose ideas to direct visas -which are currently distributed by lottery — to the most skilled and highly paid applicants. It doesn’t dictate any specifics about how to achieve the goal. The administration ultimately would like to get rid of the lottery system, one of the officials said.
How much the president can change the programme without Congress’s involvement is a matter of debate. The administration has significant leeway in deciding how to carry out the law. It could, for instance, give priority to employers who rely less heavily on holders of H-1B visas. Several Bills have been proposed in Congress to end the lottery system.
About 6% of the visas currently go to the Labor Department’s top skill level, while eight in 10 workers on the visa are paid less than the median wage for their fields, the White House said in a fact sheet distributed to reporters.
The Trump administration rolled out policy shifts earlier this month to begin cracking down on the H-1B visa system. They included a promise to pursue more investigations of fraud and abuses and a warning to employers applying for the visas not to discriminate against US workers.