TCS net profit rises 7 percent in FY09 Q1, warns of "difficult" times ahead

The Board of Directors has recommended an interim dividend of Rs.3 per share.

"We have been able to respond to the challenging macro environment and drive growth in the business under tough operating conditions and manage costs," S. Ramadorai, managing director and CEO, TCS, said.

Despite the impact of annual wage increases during the quarter under review, TCS has managed to extract "greater operational efficiencies through rigorous cost management programs that have helped us hold operating margins steady in Q1," said S. Mahalingam, executive director and CFO, TCS.

According to N. Chandrasekaran, executive director and COO, despite a "challenging external scenario," business grew in major markets like the US, the UK and Europe.

"Traction in the manufacturing, life sciences and retail verticals has helped drive growth in Q1. Our diversified business mix, portfolio of offerings and blue-chip clients across sectors places us in good position to deliver growth on our large base in the coming quarters," Chandrasekaran said.

However, Ramadorai expects the profit margin of TCS to be hit by the ongoing turmoil in the global financial markets. "TCS is cautiously optimistic about the rest of the year," he said.