Announces Rs 2,600-cr bonus for employees.
Tata Consultancy Services (TCS) on Thursday reported a subdued set of numbers for the three months to March, with dollar revenues down 0.8% sequentially and volumes growing 1.42%, partly due to headwinds in the energy and telecom verticals. Net profit for the quarter came in at Rs 5,906 crore, up 8.5% quarter-on-quarter while rupee revenues came in at Rs 24,220 crore, lower by 1.1% sequentially.
TCS chief executive officer and managing director Natarajan Chandrasekaran observed at a press conference that the March quarter had been a weak one despite which the firm had reported a constant currency growth at 1.6%.
“We had warned currency volatility would be huge and it has turned out that way so in rupee terms we have lost 270 basis points on account of cross-currency losses,” Chandrasekaran said while adding the margins had been exceptional at 27.2%.
The tech major added five clients with billings of $100 million in Q4 FY15 and expects the pricing environment to remain stable.
Chandrasekaran said he saw good momentum for the year ahead.
“The deal wins and client sentiment look positive,” he said observing TCS was well-placed in terms of its digital initiatives. “Our cloud platforms have done well and have posted $125 million in revenues in FY15 at an annual growth of 55%. This is a huge opportunity for us,” he added.
Chief financial officer Rajesh Gopinathan observed that TCS had registered good growth across continental Europe, US, while the performance in India had been muted. “Latin America saw growth but revenues were impacted due to cross currency volatility,” the CFO said. Gopinathan added that the firm had maintained profitability in a challenging operating environment, where currency has been a strong headwind. “Despite these and other macro challenges, our goal has been to support business growth while ensuring that we continue to invest in a calibrated fashion for the future,” Gopinath said.
Ajoyendra Mukherjee, executive VP, head global HR, said the company would be hiring 60,000 employees in FY16 pointing out that the company had ended FY15 with a headcount of 319,656. The average wage hike for Indian employees is 8%. Mukherjee acknowledged that attrition had gone up to 14.9% and this was related to both the industry and growth in general. “We would like to bring it down but it is difficult to say where it would be,” Mukherjee said.
TCS’ revenues in FY15 were Rs 94,648 crore, up 15.7% while net profits came in at Rs 21,696 crore, up 2.8%. The IT major reported margins of 24.1%. The firm’s market capitalisation has risen from $ 8.5 billion when it listed ten years back to around $80 billion currently and the company has announced a one-time bonus for employees which will cost it around Rs 2,600 crore. The company saw strong growth across verticals like BFS (Banking and Financial services), retail, media, utilities, though it also saw major headwinds in sectors like energy and telecom. The company’s diligenta business, which falls under its insurance vertical, saw weak growth.