India?s largest software company, Tata Consultancy Services (TCS), on Wednesday said it posted a profit after tax of Rs 1,291 crore for the first quarter of fiscal 2009, up 7% compared with the same period last year, and 4% quarter-on-quarter. However, this was lower than competitor Infosys? net profit for the quarter at Rs 1,302 crore.

The performance was driven by an 8% growth in the company?s major markets? including North America, the UK and Europe?despite the current economic slowdown, and traction in the manufacturing, life sciences and retail verticals. Revenues for the period stood at Rs 6,411 crore, up 24% compared with Q1 FY08, and 6% quarter-on-quarter.

Earnings per share stood at Rs 13.19 and the company added 35 new clients during the period. It also announced a dividend of Rs 3 a share.

Although the results came in after market hours, TCS stock was down 2.98% on the BSE on Wednesday to close at Rs 727.35. The stock also registered a 52-week low of Rs 719.10 during intra-day trade, as investors anticipated lower profits.

The company said it has launched a ?proactive cost-control programme? to maintain operating margins and the new vertical organisation structure is driving its full services play. S Ramadorai, CEO & MD, said, ?We have been able to respond to the challenging macro environment and drive growth in the business under tough operating conditions and manage costs. TCS is cautiously optimistic about the rest of the year.?

?Topline growth was mainly due to rupee depreciation,? said Harit Shah, an analyst with Angel Broking. Dealers had expected software firms to show weak earnings, hit by economic conditions in the US, the largest market for India?s software exporters.

?Of the four TCS clients in the BFSI segment who had delayed their projects in the last quarter, leading to a dip in profits, two have turned around, while the third has demerged into three clients. The company is focused on extracting greater operational efficiencies through rigorous cost management programmes that have helped it hold operating margins steady in Q1 despite the impact of the annual wage increases during this quarter,? said S Mahalingam, CFO & executive director. Full services play continued to gain traction, with key service lines contributing to growth in this quarter, TCS said in a statement.

Its cash and liquid investments crossed $1 billion. However, the company registered foreign exchange losses of Rs 75.3 crore, against foreign exchange gains of around Rs 59 crore in the previous quarter.