TCS profit rises 4.6% q-o-q to R5,288 crore

Written by fe Bureau | Mumbai | Updated: Oct 17 2014, 07:18am hrs
Tata Consultancy Services (TCS), the countrys largest information technology (IT) services exporter, on Thursday reported a 4.6% sequential increase in net income for the quarter ended September 30 at Rs 5,288.30 crore on the back of robust performances in core markets like the US, UK and Europe.

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The impact of integration of an entity in Japan a joint venture between TCS, Mitsubishi and IT Frontier Corporation also provided additional growth to units like manufacturing, hi-tech, the company said.

The Mumbai-based major reported total revenues of

Rs 23,816.50 crore during the same period, registering 7.7% sequential growth. The results were reported according to the IFRS standards.

On a year-on-year basis, the company's revenues were up 13.5% and net income was up 13.2%. Revenues from the Japan joint venture stood at $103 million, or Rs 633.24 crore, during the quarter.

Driven by strong volume and utilisation rates, this has been a quarter of steady, consistent performance, said TCS's managing director and chief executive N Chandrasekaran.

The operating margin rose 55 bps to 26.8% during the quarter on the back of a 70-bps gain from depreciation and a 10-bps gain from currency fluctuations. However, the company lost close to 50 bps on operating margin on the account of its its newly merged entity in Japan.

During the quarter, TCS added four clients with a market value of over $50 million and nine companies with over $20-million market capitalisation. The IT major also bagged eight large deals two in Banking and financial services (BFS), two in manufacturing and one each in retail, energy, healthcare and utility businesses.

The company's gross employee additions stood at 20,350, with net addition of 8,326 employees during the quarter, taking total employee strength to 313,757 on a consolidated basis. The utilisation rate, excluding trainees, stood at 86.2% while the attrition rate increased to 12.8% during the September quarter from the previous quarter's figures of 12.3%.

Meanwhile, despite recording high growth in the US and Europe, TCS registered de-growth in South America as some of the ramp-ups didn't happen as expected.

TCS, however, registered double-digit growth in the Indian market the second consecutive quarter of growth after several quarters of negative growth on the back of higher corporate spending and Modi government's IT initiatives, where the company has been roped in to provide solutions.

TCS shares closed at

Rs 2678.85 apiece, down 0.77%, on the BSE on Thursday. The benchmark Sensex closed at 25,999.34, down 1.33% from

the previous day.