TCS crosses $2 bn mark

Mumbai, April 19 | Updated: Apr 20 2005, 05:30am hrs
Tata Consultancy Services (TCS) has become the countrys first IT company to cross the $2 billion mark as it closed fiscal 2005 with Rs 9,748.47 crore in revenues. At Rs 1,976.90 crore in net profit, it is also the first software giant to cross $500 million in net profit. Its fourth quarter of Rs 471.79 crore, however, was down 34% over the preceding quarter of FY05. The company reported revenues of Rs 2,603.97 crore in the fourth quarter. The board has declared a final dividend of Rs 5 per share.

Reacting strongly to the results, the TCS stock at The Stock Exchange, Mumbai (BSE) on Tuesday opened at Rs 1,310 and touched an intra-day low of Rs 1,180 to recover and close at Rs 1,209.75, resulting in a decline of 8.4%.

Commenting on the companys performance, CEO and managing director S Ramadorai told newspersons, Through our strategic initiatives, we have managed to double our revenues in the last two years. TCS dependence on GE has come down from 14.83% during the previous quarter to 13.96% in the fourth quarter.

He added that the company had a net addition of 1,775 employees in the fourth quarter and has made campus offers to 6,384 students during the 2004-05 financial year. With the increase in employees, TCS total employee strength stands at 45,714.

We have announced a 10% hike in salary for employees who are based in India and a 3% hike in salary for offshore employees, said TCS human resources executive vice president and client organisation head S Padmanabhan. He, however, clarified that the employees based offshore have an Indian salary component.

IT index sheds 57 points

The dismal results posted by Tata Consultancy Services took their toll on almost all technology stocks on Tuesday. The BSE IT index was the worst performer shedding 57.2 points or near 2.38 %. The BSE Teck index was the second biggest loser shedding 24.42 points.

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The decline in net profit during the fourth quarter over the preceding quarter is attributed to the booking of foreign currency revenues at a lower rupee rate of Rs 43.50 as compared to Rs 44.74 to a dollar. The company had also made an additional adjustment of Rs 102 crore for EVA based payout in the fourth quarter to provide for the same, a TCS statement said. This is the maiden full year financial results for TCS ever since the company went public and was listed on the bourses last year.

Prior to these deductions, net profit during the fourth quarter stood at Rs 611.6 crore, which was 30.13% higher than that of the corresponding quarter for FY04 and down by 15% as compared to Rs 718.61 crore during the immediate preceding third quarter. According to an IT analyst at a foreign research house, the exchange rate fluctuations have adversely impacted TCS.