Tata Consultancy Services (TCS), India's largest software services exporter, posted a better-than-expected rise in quarterly profit driven by increased spending by clients, and said the uncertain global economy was unlikely to hurt demand.

TCS, a unit of the salt-to-steel conglomerate Tata Group , said fiscal first-quarter net profit rose to Rs 2,380 crore ($535 million) in accordance with international financial reporting standards. Revenue rose 31 percent to Rs 10,800 crore based on international financial reporting standards, as it added 24 new clients in the quarter ended June.

Profit margins in the June quarter dropped 64 basis points, mainly due to wage hikes. It also added 3,576 net staff in the April-June quarter.

The company, whose major clients include Citigroup , General Electric , British Airways and Sony Corp, reported its results under IFRS rules for the first time, moving away from U.S. accounting standards.

The global information technology market will grow 7.1 percent this year, up from a previous projection of 5.6 percent, according to Gartner, which bodes well for top Indian exporters like TCS and Infosys.

Still, India's No.2 software services exporter Infosys Ltd warned on Tuesday it faces a volatile global economy that could slow client spending, and posted its slowest pace of quarterly customer acquisition in at least four years.

"We remain watchful but do not expect the current macro issues to impede business decision-making in those markets," TCS Chief Financial Officer S. Mahalingam said in a statement.

Shares in TCS, valued at about $50 billion fell by over 2 per cent on the bourses today on the back of heavy sell-off. Shares of the company dropped by 2.23 per cent to settle at Rs 1,125.25 as jittery investors abandoned the bellwether counter.

The stock which was the worst performer among the Sensex 30-stocks shed 2.77 per cent to hit a low of Rs 1,119 during the day.

Similar was the trend at the National Stock Exchange, where the scrip ended at Rs 1,119.20, down 2.60 per cent from its previous close.

In terms of volume, over 39 lakh shares of the company changed hands on the bourses during the day.

Analysts said fall in the stock came in the wake of nervousness prevailing in the market as Infosy's number failed to impress investors with its first quarter earnings.

Selling pressure also intensified at the counter of other IT companies, with Infosys shedding 1.55 per cent, Wipro 0.59 per cent and HCL Tech 0.84 per cent.

Led by losses in these stocks, the BSE IT index settled the day at 5,835.19, down 1.47 per cent. (Economic Times)