TCS sees slower Q3 volume growth

By Janaki Krishnan and Bharghavi Nagaraju

MUMBAI (Reuters) - Tata Consultancy Services, India's top outsourcing company, said on Monday it does not expect volume growth in the December quarter to match the September quarter as firms are still deciding on IT budgets.

"As far as this quarter is concerned, it will certainly be a growth quarter. But we don't believe it will be same growth, in terms of volume, as the previous quarter," Chief Financial Officer S. Mahalingam told the Reuters India Investment Summit.

The company's revenue rose 3.2 percent in the September quarter over the June quarter.

Corporate IT budgets have been tight for almost a year due to the global financial crisis and economic downturn, but now signs were that potential customers were looking at outsourcing as a way to better manage their service.

He said the deal pipeline was looking good as decision times by companies were getting shorter.

IT research firm Gartner in October said global IT spending was likely to decline 5.2 percent in 2009, marking the worst year on record, but expects a return to growth of 3.3 percent in 2010.

On Monday, the Economic Times reported leading Indian outsourcers stood to gain contracts worth about $1 billion in the next one to two years as U.S. banks exit the troubled asset relief programme.