TCS net jumps 50 percent; beats estimates
Posted on Jan 16 2014 | IANS
Mumbai, Jan 16 : Beating street expectations again, Indian IT bellwether Tata Consultancy Services Ltd (TCS) reported net profit of Rs.5,314 crore for third quarter (October-December) of this fiscal (2013-14), a whopping 50 percent increase year-on-year (YoY) and 13 percent sequentially, as per the Indian accounting standard.
In a statement after the markets closed for the day, the global software major Thursday said revenue for quarter under review (Q3) increased to Rs.21,294 crore, registering 33 percent YoY growth but 1.5 percent sequentially from second quarter (July-September).
Under the International Financial Reporting Standard (IFRS), revenue rose to USD 3,438 million (USD 3.4 billion) from USD 3,337 million (USD 3.3 billion) in second quarter (Q2), posting a marginal 3.8 percent sequential growth.
With a operating margin of 29.7 percent, operating profit grew 45 percent YoY to Rs.6,335 crore though 0.1 percent less sequentially.
"Strong international demand for our services and discipline in execution has helped us maintain momentum and post robust growth in volumes as well as realization," TCS chief executive N. Chandrasekaran said in a statement here later.
The company's diversified market presence and services portfolio also helped it to overcome seasonal weakness and soft demand in the Indian market.
"Based on initial discussions with our customers, we believe 2014 will be a stronger year for us than 2013, as customers execute their business plans in a relatively stable environment," Chandrasekaran asserted.
Though North America continues to account for the company's major export revenue, Europe led growth, driven by investments being made in that market.
"We have been able to maintain our profitability by operating in a disciplined manner while sustaining our investments in customer-facing initiatives globally. We have also been able to increase our cash generation due to efficient working capital management," chief financial officer Rajesh Gopinathan said in the statement.
Verticals such as life science and health care, manufacturing, media, travel and hospitality and telecom contributed to robust growth in the quarter.
Among growth markets, Latin America, APAC and MEA (Middle East and Africa) registered strong growth, while India business suffered from volatility and declined sequentially.
Among service lines, business process services, enterprise solutions, global consulting were leaders.
Though the company hired 14,663 people, 9,200 techies left during the quarter, resulting in net addition of 5,463 employees and taking the total headcount to 290,713 at the end of quarter (Dec 31).
"To support business growth, we have increased our hiring target by an additional 5,000 employees for this fiscal to 55,000 professionals," human resources global head Ajoy Mukherjee said on the occasion.
Utilisation rate was 84.3 percent excluding trainees and 77.5 percent including trainees.
"Our efforts to push the utilisation lever is paying dividends with utilisation rates, including trainees rising to 77.5 percent and that excluding trainees at over 84 percent," Mukherjee added.