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TCS announces Garuda Indonesia project, warns of weak Q4 earnings

TCS announces Garuda Indonesia project, warns of weak Q4 earnings

By Press Trust of India | Updated: 16 May 2014 12:33 IST

Country's largest software services firm Tata Consultancy Services (TCS) has deployed a maintenance, repair and overhaul (MRO) application for Garuda Indonesia Airlines.

With the TCS SWIFT MRO solution, Garuda replaced over 50 legacy applications, implemented over 300 business processes, and migrated over three million records of data for 140 aircrafts and fitted parts into a unified solution, TCS said in a statement.

The first phase of the project, now live, comprises the SAP-based end-to-end pre-configured SWIFT MRO solution for MRO, supply chain processes, finance and human resources modules, it added.

Garuda's relationship with TCS began in 2012 when the airline sought a solution to upgrade, consolidate and enhance its MRO technology infrastructure, which was spread across numerous applications from multiple vendors.

"Phase II is coming soon, which will further help the airline deliver exemplary aircraft maintenance services in line with our strong growth and development of a global leading airline brand," Garuda Indonesia EVP Strategy, Business Development and Risk Management Judi Rifajantoro said.

Also on Wednesday, the largest software services firm Tata Consultancy Services has warned of weaker earnings for the January-March quarter following a similar warning by Infosys last week.

TCS, in a management commentary, said the fourth quarter of the financial year is expected to be weaker than October-December and is typically so for IT services firms on account of furloughs.

The fourth quarter is seasonally weaker than the third, it said. Europe is growing well, while the US and the UK are growing at "company average," TCS said. Weakness in India continues and is "likely to de-grow again," it said.

TCS posted a 50.3 percent increase in consolidated net profit at Rs. 5,333 crores in the October-December quarter, while revenue rose 32.5 percent to Rs. 21,294 crores.

Last week, India's second-largest IT services exporter Infosys expressed caution on the business environment and warned that its near-term performance could be choppy.

"At a broad level, we are seeing slowdown with unanticipated rampdowns and some cancellation of our projects," Infosys CEO SD Shibulal had said.

The company hinted that its full-year sales may be "near the lower end" of its guidance, sending Infosys shares down about 9 percent.

TCS, however, is confident that 2014-15 would be better than the ongoing financial year, driven by an uptick in discretionary spending.

Verticals such as media and life sciences are showing good growth whereas BFSI, retail, manufacturing, telecom and hi-tech are growing on par, it said.

TCS expects minimal impact of currency, with no difference between constant currency revenue and revenue in dollar terms.

There could be a "10-20 basis points difference between constant currency revenue and INR revenue," it said, adding that other income is likely to be flattish quarter-on-quarter.

Shares of TCS fell 3.84 percent to close at Rs. 2,040.95 on the BSE.

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