Reuters Summit-India's TCS sees slower Dec qtr volume growth

(For other news from the Reuters India Investment Summit, click here)

MUMBAI, Nov 23 (Reuters) - Tata Consultancy Services (TCS.BO: Quote, Profile, Research), India's leading outsourcing firm, does not expect volume growth in the December quarter to match the September quarter as companies are still deciding on IT budgets, a senior official said.

However pricing, which was a big concern towards the end of the previous fiscal year, was no longer such a major issue, Chief Financial Officer S. Mahalingam told the Reuters India Investment Summit on Monday.

"As far as this quarter is concerned, it will certainly be a growth quarter. But we don't believe it will be the same growth, in terms of volume, as the previous quarter," Mahalingam said.

Customer budgets had 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 services better, he said.

"I would say that the pricing pressure is certainly not felt intensely at this point in time," he said

TCS has sales of $6 billion in sales in 2008/09 (April/March). The IT outsourcing sector is seeing a pick-up in business as companies win large deals and pricing pressure eases after core financial clients had cut spending in the downturn.

Part of the diversified Tata Group, which straddles the commodities, automobiles, metals and IT industries, Tata Consultancy counts Citigroup (C.N: Quote, Profile, Research), General Electric (GE.N: Quote, Profile, Research), General Motors and Ferrari among its clients.

Shares in Tata Consultancy, valued at $28 billion, have almost tripled so far this year, outpacing a 73 percent rise in the main index .BSESN. (For summit blog: blogs.reuters.com/summits/) (For all summit stories: here) (Reporting by Janaki Krishnan and Bharghavi Nagaraju; Editing by Anshuman Daga and John Mair) ((janaki.krishnan@thomsonreuters.com, +91-22 66369138; Reuters Messaging: janaki.krishnan.reuters.com@reuters.net)) ((if you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))