Source: Money Control
Tata Consultancy Services reported 23% year-on-year rise in second quarter consolidated net profit at Rs 2,887 crore, helped by continued demand for outsourcing services and said the deal pipeline remains strong.
Revenue for October-December quarter jumped 37% from a year ago to Rs 13,204 crore, India’s top software services exporter said on Tuesday
Analysts on average had expected TCS net profit at Rs 2,893 crore on revenue of Rs 13,230 crore, according to CNBC-TV18 poll.
“While technology budgets are still being set for the next fiscal (year), there is little doubt that technology is a key resource to help global businesses optimise their operations and fuel growth in the current economic climate,” said N Chandrasekaran, CEO and MD.
TCS’ operating margin in the third quarter was up 218 basis points at 29.2%.
“We continue to focus on managing our operations optimally in the face of increased external volatility. We have increased operating margins significantly by taking the benefits of growth, exchange movements and by keeping a strong focus on cost management,” said S Mahalingam, CFO.
While the rupee depreciation aided margin expansion, net earnings were hurt due to foreign exchange losses.
TCS said it had a forex loss of Rs 300.81 crore in the third quarter, versus a gain of Rs 52.16 crore in the year ago quarter.
“The level of currency and market volatility has only risen in the past three months and we are adapting our strategies accordingly,” said CFO S Mahalingam.
The global economic uncertainties led by the euro zone debt crisis is a major worry for Indian software service providers. TCS, however, said it saw growth across regions, with Europe “leading the growth story among mature markets.”
The company said Europe business grew 18.1%, followed by US at 13.3% and UK grew by 9.5%, in the third quarter. Latin America revenue grew 18.6%, APAC (Asia-Pacific) region saw a 15.7% growth, while revenues from India, were up 14.8%, it said.
“All industry sectors have shown strong growth with all sectors growing at more than double digits except telecom,” TCS said.
TCS added 40 new clients in the third quarter and signed 10 large deals during the quarter. The number of USD 100 million clients rose to 14 from 12, it said.
TCS net added 11,981 employees in Oct-Dec and had 226,751 employees as of Dec 31. It plans to add 15,000 employees in the current quarter.
The company said attrition rate dropped to 12.8% in the quarter. Attrition in IT services business was at 11.7%, while BPO (business process outsourcing) attrition was at 22.6%, it said.
TCS shares closed down 0.5% at Rs 1,103.95 on NSE before the results announcement.