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The US Federal Reserve's optimistic growth prediction is good news for IT giants like Tata Consultancy Services

How do you know the big daddy of Indian IT is set for a super-duper year? First, its hiring target is up to 55,000 this year-the second best in its history and second, it has announced healthy wage hikes for FY15.

TCS' optimism is not unfounded. India's largest IT company has been optimistic for some time now-often at contrast to its peer.

Infosys-and has come out on top each time. It's therefore, no wonder that the markets cheered TCS' outperformance and the stock gained 40 per cent in the last 12 months, and there is only more to come.

IT spends especially in the US, go up or down with growth in the economy. The US Federal Reserve released an optimistic 2.8-3 per cent growth projection for this year-higher than the average 2.2 per cent growth since the financial crisis hit. That's good news for IT vendors like TCS. IT spends will look up, which they can tap into. Europe too is strengthening.

In a remarkable move, TCS merged its Japan subsidiary with that of Mitsubishi's IT services arm. Remarkable, because Japan is the second largest IT market in the world with an estimated $110 billion of annual IT spends and has so far been a very tough nut to crack for Indian IT companies who have managed a penetration of only 0.3 per cent in the island nation.

TCS will be able to take advantage of local Japanese talent and the services that the high-pedigree Mitsubishi brings to the table.

Short term hiccups: The recent run up in the markets has given defensives the miss. As such TCS has not moved much this year (year to date). This trend could continue and TCS could lag as sectoral rotation plays out, but if its robust annual earnings growth of 30 per cent in the last five years (at a time then the IT spend was lower than what it is today) is anything to go by, TCS seems set for a continued strong performance well into the future. These factors make it a stock to bet on for the long run.