The Telegraph
Friday , January 17 , 2014
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Stellar show on tech screen
TCS net jumps

Mumbai, Jan. 16: Tata Consultancy Services (TCS), the country’s largest software exporter, today beat analysts’ estimates by posting a 49.6 per cent jump in net profits at Rs 5314 crore in the third quarter ended December 31 as customer spending in the US and Europe saw robust growth.

It had earned a profit of Rs 3,551.6 crore in the same quarter a year ago.

The pace of growth in net profits was the fastest since the quarter ended March 2010.

The consensus estimate of TCS’ net profits in the quarter among analysts was Rs 5140 crore.

Revenues surged 32.5 per cent to Rs 21,294 crore from Rs 16,069.9 crore in the year ago quarter.

On a sequential quarter basis, net profits rose 13 per cent and total revenues by 1.5 per cent.

“Based on our initial discussions with our customers, we believe 2014 will be a stronger year for us than 2013, as customers execute their business plans in a relatively stable environment,” said N. Chandrasekaran, chief executive officer and managing director. “Our continuous investments position us well to help customers re-imaging their business.”

In dollar terms, profits rose 31.7 per cent to $ 858 million from $ 652 million a year ago. Revenues rose 3.8 per cent to $ 3.44 billion from $ 2.94 billion in the same quarter a year ago.

The company has raised its hiring target for the fiscal year ending March 31 to 55,000 people from 50,000. It had a head count of 290,713 and reported a utilisation level of 84.3 per cent without trainees and 77.5 per cent when trainees were included.

The company added 5483 employees during the quarter and reported an attrition rate of 10.9 per cent.

The company said it had signed eight large deals in the quarter including four $ 20 million clients and two $ 50 million clients.

The TCS stock closed at Rs 2351.35 on the Bombay Stock Exchange, down Rs 2.90 from Wednesday’s close. The results were released after market hours.

The company said Europe had led the growth in the quarter while North America and the UK also reported brisk business. Going by verticals, growth in the quarter was driven by life sciences and healthcare, manufacturing, media, travel and hospitality and telecom.

Operating margins stood at 29.7 per cent for the quarter, and the company said it would be able to maintain its margin in the 27 to 29 per cent range.

The rupee’s appreciation in the last quarter of 2013 affected TCS’s margins by 46 basis points, Chandrasekaran said. “We keep hedging for two quarters ahead, and we are holding to that strategy,” he added.

The board approved a third interim dividend of Rs 4 per share.