Tata Consultancy Services Q1 profit up 45% to Rs 5,568 cr

Written by Press Trust of India | Mumbai | Updated: Jul 18 2014, 03:36am hrs
TCSThe Mumbai-based firm had posted a net profit of Rs 3,840 crore in the year-ago period, it said in a BSE filing
Country's largest software services firm Tata Consultancy Services (TCS) today reported a 45 per cent jump in consolidated net profit at Rs 5,568 crore for the first quarter ended June 2014, driven by broad based growth across verticals and geographies.

The Mumbai-based firm had posted a net profit of Rs 3,840 crore in the year-ago period, it said in a BSE filing.

Consolidated revenue rose 22.9 per cent to Rs 22,111 crore for the April-June quarter this fiscal from Rs 17,987 crore for the same quarter in the 2013-14 fiscal. The figures are in Indian GAAP.

Commenting on the performance, TCS CEO and Managing Director N Chandrasekaran said robust volumes and healthy growth across all industries and key markets helped TCS start the new fiscal on a strong note.

"We have a strong demand pipeline in place and our customer centric mindset, leadership in the digital space and strong execution capabilities will help us sustain our momentum," he added.

The company announced a special dividend of Rs 40 per share on the 10th anniversary of its IPO.

TCS' operating margin stood at Rs 5,935 crore in the first quarter, a growth of 22.5 per cent year-on-year (y-o-y).

It added 15,817 (gross) and 4,967 (net) employees during the said quarter, taking its total headcount to 3,05,431 as of June 30, 2014.

The utilisation rate touched an "all-time high" of 85.3 per cent excluding trainees, TCS said.

"Our disciplined stance in operations helped us mitigate the impact of multiple headwinds like currency movements, accelerated depreciation norms and wage hikes during the quarter," TCS CFO Rajesh Gopinathan said.

TCS results were above estimates. The highlight of the results was the 5.7% volume growth, which was better than expectations. The company has maintained that, growth in FY15 will be better than the growth rate in FY14, which is encouraging. Consistent high volume growth reflects effective demand generation initiatives and efficient execution for TCS. We remain positive on the future prospects of TCS, Dipen Shah, Head- Private Client Group Research, Kotak Securities.

Outsourcing deals boost profit at India's Tata Consultancy

(Reuters) Tata Consultancy Services , India's biggest software services exporter, posted a 26.9 percent increase in quarterly net profit, as it won large outsourcing deals from Western clients in sectors including retail and life sciences.

TCS, which counts Cisco and Hewlett-Packard among its customers, has increased profits at a faster pace than rivals Infosys Ltd and Wipro Ltd, which have both had internal management changes over the last two years.

In that period, TCS has bet on higher IT spending by clients in the financial services, retail and life sciences sectors to boost growth as the global and U.S. economies recover.

Consolidated net profit for the three months to June 30, its financial first quarter, rose to 50.58 billion rupees ($840.5 million) from 39.87 billion rupees a year ago, the Mumbai-based company said on Thursday.

That compares with analyst estimates of 48.86 billion rupees, according to Thomson Reuters data.

Revenue rose 22.9 percent to 221.11 billion rupees.

TCS, which gets more than three-quarters of its revenue from the United States and Europe, said business volume grew 5.7 percent, led by a growth in North America, Europe, India and the Asia-Pacific region.

Shares in Tata Consultancy, a unit of India's Tata conglomerate, closed 0.8 percent lower at 2,381.95 rupees before the announcement. The main Mumbai market index was up 0.2 percent.