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  1. Tata Consultancy Services: Tame numbers eclipse good OPM

Tata Consultancy Services: Tame numbers eclipse good OPM

TCS says order book also at highest ever level

By: | Mumbai | Updated: October 14, 2015 8:25 AM
The TCS management said the company’s order book during the quarter had been the highest ever and 30% bigger than in the previous-highest quarter.

The TCS management said the company’s order book during the quarter had been the highest ever and 30% bigger than in the previous-highest quarter.

Tata Consultancy Services on Tuesday reported a sedate set of numbers for the three months to September with net profit up 3.2% sequentially to $926 million while revenues rose 3% to $4.16 billion. While India’s biggest software exporter posted strong operating margins of 27.1% and reported a reasonable volume growth of 4.9%, the Street might be disappointed with the 3.9% sequential increase in revenues in constant currency terms.

On Monday, Infosys reported a strong set of numbers for Q2FY16 with a sequential revenue growth of 6.9% in constant currency terms. However, the company lowered its revenue guidance in dollar terms for FY16.

The TCS management said the company’s order book during the quarter had been the highest ever and 30% bigger than in the previous-highest quarter. “Our core markets are doing well and our investments are being validated so we are all right,”

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N Chandrasekaran, MD and CEO, said at a media interaction, adding that pricing pressures were a given. He added the company had seen secular growth across verticals including manufacturing, BFSI and retail though business in Japan and at Diligenta remained soft and would do so for some more time. However, the Latin American business was doing better, he said.

The TCS chief asserted momentum in the digital space was high and the areas that the firm was betting on, such as training, were doing well. “The digital piece has grown well and there is strong traction of digital deals across verticals,” he said. The firm added three customers with revenues of $100-million-plus and six customers with revenues of $10-million-plus.

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Rajesh Gopinathan, chief financial officer, said pricing was on a stable path and said much of the improvement in the margins had come from currency gains. TCS added 25,186 employees during the quarter and the company now employs 3.35 lakh people. Ajoyendra Mukherjee, executive vice-president and head of global human resources, observed that attrition in absolute numbers had dropped from 15,000 to 14,000 during the quarter. The utilisation, excluding trainees, was 86%.

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