India’s largest software services firm Tata Consultancy Services (TCS) has reported a 16 per cent surge in net profit to Rs 6,084.66 crore for the quarter (Q2) ended September 30. However, according to the company statement, as per IFRS, the net profit for Q2 stood at Rs 6,055.20 crore whereas revenues was Rs 27,165.50 crore.
The Mumbai-based firm had reported a profit of Rs 5,244.28 crore in the corresponding period last fiscal, it said in a regulatory filing.
The company’s total income from operations for the quarter rose 14.06 per cent to Rs 27,165.48 crore as against Rs 23,816.48 crore last year. The figures are in Indian GAAP.
TCS CEO and MD N Chandrasekaran said: “We have delivered accelerated growth in constant currency terms for Q2. Driven by great execution on the ground, our broad-based performance has been led by strong sequential growth in BFS, retail and life sciences verticals with the UK and North America leading the markets.”
The company said core markets like the UK, North America and Europe grew smartly along with emerging markets like Latin America, India and MEA.
TCS also announced a dividend of Rs 5.50 per share. Its operating margin for the quarter stood at 27.1 per cent.
The company said there was a total gross addition of 25,186 people (net addition of 10,685 employees) taking the total employee strength of 3,35,620 on consolidated basis.
The utilisation rate (excluding trainees) was at 86 per cent while the attrition rate stood at 16.2 per cent.
“On a quarterly basis, our retention levels have improved this quarter with a net addition of over 10,000 employees in Q2. Our hiring continues to be strong with all-time high of over 25,000 employees joining us this quarter,” said Ajoy Mukherjee Executive VP and Global Head Human Resources.
Infosys vs TCS: Check out the numbers below; read story
|Infosys||July-Sep 2014||Apr-June 2015||Jul-Sep 2015||% QoQ||% YoY|
|figures (consolidated) are in Rs crore|
|Tata Consultancy Services||July-Sep 2014||Apr-June 2015||Jul-Sep 2015||% QoQ||% YoY|
|figures (consolidated) are in Rs crore||Source: company, bse|
At the interaction with CEO & MD N Chandrasekaran, others:
Speaking to the media after announcing the key numbers, Tata Consultancy Services CEO & MD N Chandrasekaran said, “We have always performed better than the industry. We are happy with our performance in Q2. TCS added three clients in $100 million band. $10 million customers are up by 6 in Q2.”
TCS chief painted a rosy picture and added, “We will be hiring. We are looking at building up the bench at TCS. We have increased hiring target to 75,000 from 60,000.”
Speaking with the same positive sentiment, he said, “Over 30,000 employees have already been trained in digital learning platform in Q2. Gross employee addition in Q2 was 25,186, taking total headcount to 335,620.”
Rajesh Gopinathan, chief financial officer (CFO) at TCS said the company is focused on fiscal discipline to help business growth. “Our focus on profitability has increased our margins sequentially and generated cash flows while investing in future growth,” he said.
Chandrasekaran said, “TCS has delivered a very secular growth. North America and UK in fact, have done exceeding well for us.”
Chandrasekaran laid emphasis on the fact that the company had delivered an accelerated growth in constant currency terms. “Given the growing market adoption of Digital, we continue to take new IP-led products and platforms to market successfully as well as invest in training our talent.” (In an IP-led strategy, technology companies such as TCS license the software they had developed and own rights for a fee, and also offer services around the software to clients. This helps them to improve their revenue and margins, since the same software can be licensed to many clients.)
On a query about dollar-rupee volatility, Chandrasekaran said, “This is no longer a dollar-rupee game for TCS. So many currencies are involved, Australian dollar, Brazilian real, Euro, and others. TCS is involved and affected by so many countries now”.
On attrition, Ajoy Mukherjee, Global Head, HR said, “Our retention levels have improved this quarter with a net addition of over 10,000 employees in Q2.”
Chandrasekaran added that, “TCS employee utilisation including trainees is at 82.3%; excluding trainees is 86% and employee attrition at 16.2% including BPS.”
TCS chief added that, “Attrition in declining trend, seeing month-on-month decline.”
Talking about the future and TCS’ strong/weak areas and expectations about the traditionally weak third quarter, Chandrasekaran said, “There are always some weak spots, some strong in every company, but overall we are doing very well. And, what I will say is, the opportunities are huge.”
Ahead of the earnings announcement, shares of TCS closed 0.19% higher at Rs 2,597.40 per stock while the benchmark S&P BSE Sensex ended 0.21% lower.
Here are the key numbers:
* Volumes, Digital drive broad-based growth in Q2
Revenue at $4.16 billion up 3% Q-o-Q; up 5.8 % Y-o-Y
– Net Income at $ 926 million up 3.2% Q-o-Q; up 6.2% Y-o-Y
– Revenue growth in Constant Currency: 3.9% Q-o-Q
– Robust Volume growth of 4.9%
Financial Highlights for Quarter Ended September 30, 2015
Operating Profit at $ 1,125 million; Growth of 6.0% Q-o-Q and 6.7% Y-o-Y
– Earnings Per Share at $ 0.47
Business Highlights for Quarter Ended September 30, 2015
– Gross employee addition: 25,186
– Total headcount: 335,620
– Utilization: 86 % (excluding trainees) & 82.3% (including trainees)
– $100M+ Customers up by 3; $10M+ customers up by 6