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Friday, January 17, 2014

India's TCS sees stronger sales growth; competition weighs on shares, (NYSE: INFY)

India's top IT services provider Tata Consultancy Services Ltd (TCS) forecast faster sales growth in the next fiscal year but failed to ease investor worries that smaller rivals will also benefit from an anticipated rise in client demand.Shares in TCS fell as much as 5.6 percent on Friday, on track for their biggest single day drop in more than 1-1/2 years, on concerns that the company will have to fight hard for contracts in the United States and Europe, the main markets for India's $108 billion IT services industry."Competition is getting fierce in the market and small players are becoming very aggressive. TCS may see some of its market share going to its rivals in the medium term," said Taina Erajuuri, a Helsinki-based portfolio manager at FIM India, whose holdings include TCS as well as rivals Infosys Ltd and HCL Technologies.Global IT spending growth is expected to accelerate to more than 5 percent this year after growing last year at its slowest pace since the 2008 global financial crisis, research firm International Data Corporation said.

Infosys Limited (Infosys) provides business consulting, technology, engineering and outsourcing services. Shares of INFY traded higher by 1.18% or $0.71/share to $60.70. In the past year, the shares have traded as low as $38.91 and as high as $60.94. On average, 1083030 shares of INFY exchange hands on a given day and today's volume is recorded at 2135411.