Tata Consultancy Services (TCS) has reported a net profit of Rs 1,290.61 crore for Q1 of current financial year. It is less than its competitor Infosys which has recorded a net profit of Rs 1,302 crore for the first quarter.

TCS has also noticed a forex loss of Rs 75.3 crore in the first quarter while it has recorded Rs 59 crore forex gain in the previous quarter.

Various causes contributed to fall in net profit for the first quarter. Salary hike by TCS and weak rupee are the main factor for decrease in net profit as per market analysts.

Slowdown in US economy and revenues from a large European bank also contributed to loss in profit. European bank is a top client of TCS and due to its restructuring the loss in revenue is recorded. The shares of TCS fell nearly 3% to Rs 727.35 on BSE before its results were announced late in the evening.

There are indications of economic recession in the major economies of world in near future. Retail, manufacturing and life sciences are growing well while new markets are growing with lower pace as per company’s CEO and MD S Ramadorai.

The company’s official said would recruit 30,000-35,000 employees for this year despite signs of global slowdown. Around 9,000 employees were recruited in the first quarter by the company and it will soon go ahead with new recruitment. The total strength of the employees was 116,308 from 64 nationalities in Q1 out of which 9.2 per cent and 29 per cent are women.