The Telegraph
Thursday , April 17 , 2014
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TCS delivers a scorcher

Mumbai, April 16: Tata Consultancy Services (TCS) today reported stellar fourth-quarter results on higher orders from key regions such as the US, Asia Pacific and Europe and hoped to do better during the current financial year.

The country’s largest software exporter surpassed Street estimates by reporting a 51.5 per cent jump in net profit at Rs 5,296.7 crore against Rs 3,497 crore in the year-ago period.

Analysts had expected the company to report a net profit of around Rs 5,200 crore. Revenues during the fourth quarter rose over 31 per cent to Rs 21,551 crore.

The robust performance of TCS came a day after its peer Infosys topped Street estimates for its fourth-quarter numbers on Tuesday. However, the Bangalore-based firm sounded less optimistic about the current year, projecting a dollar revenue growth of just 7-9 per cent.

Though TCS does not come out with any formal guidance, its CEO and managing director N. Chandrasekaran expected 2014-15 to be a better year.

Chandrasekaran exuded confidence that the company would outpace industry body Nasscom’s revenue target of 13-15 per cent growth this fiscal.

“The financial services, retail and life-sciences sectors will drive revenue growth in fiscal 2014-15, while deals will come from the areas around simplification and efficiency, digital, and regulatory and governance fronts,” he said.

Commenting on the fourth-quarter performance, Chandrasekaran said growth was led by regions such as Europe, the US and Asia Pacific.

He added that all major industry verticals grew in double digits. Sectors such as banking & financial services and retail along with utilities, media and energy performed well during the period.

TCS had earlier warned of a weak fourth quarter because of a poor performance in the Indian market. The company added that while there is generally an uptick in business from India during the fourth quarter, it was not very evident this time.

Chandrasekaran was, however, optimistic on the outlook for 2014-15.

“We are upbeat on growth opportunities over the next 12 months. Based on the order book, deal pipeline and discretionary spend, we believe 2015 will be a stronger year than 2014,’’ he added.

Ajoy Mukherjee, executive vice- president & head of global human resources at TCS, said the company had also hiked wages across regions. In India, the average wage hike is 10 per cent (14 per cent plus for better performers) while it stands at 2-4 per cent and 4-6 per cent in the developed regions and developing area, respectively.

While the wage increase is expected to hit margins during the first quarter of 2014-15, TCS expects it would be made up during the course of the year through operational efficiencies.

Mukherjee disclosed that with business demand continuing to be robust, TCS made almost 25,000 fresh offers on engineering campuses for trainees who will join the company from the second quarter of this year. The total employee strength of the company stood at 300,464 professionals. In the current year, it is expected that there will be gross additions of 55,000 employees.