TCS Q2 net profit rises 49%
Operating margin stands at 26.8%
Tata Consultancy Services (TCS) today breezed past street estimates with better-than-expected earnings as net profit for the quarter ended September 30, 2012 climbed 49 per cent from a year earlier to Rs 3,434 crore driven by growth across geographies and businesses.
Revenues were up 34 per cent year-on-year at Rs 15,621 crore during the quarter. On a sequential basis, profit after tax and net sales increased by 3.5 per cent and 5 per cent, respectively.
A Business Standard poll of five brokerages expected the country's largest software exporter to report a net profit of Rs 3,391 crore on revenues of Rs 15,628 crore.
"We have delivered a strong performance with well-rounded growth across industries and geographies...As the global operating environment continues to evolve, there is little doubt that technology is playing a more pivotal role to shape the future of every industry than ever before," N Chandrasekaran, chief executive and managing director of TCS, said in his post-earnings comments.
The growth was broad-based driven by manufacturing, retail, telecom, banking and financial services (BFSI). New services like infrastructure recorded double digit growth.
Operating margin declined a tad to 26.7 per cent from 27.4 per cent in April-June quarter and 27 per cent a year ago.
Chandrasekaran said bill rates during the quarter remained steady, while business volumes grew by 5 per cent aided by new service offerings. He expects the software firm's margin to remain steady.
"In the current operating context, it is important for us to remain efficient, keep a healthy grip on expenses, conserve cash and at the same time invest for the future. In this quarter, TCS has posted a credible margin performance at the operating level and we have also expanded our net margins by managing the ongoing currency volatility," S Mahalingam, chief financial officer (CFO) and executive director of the company, said.
"We will continue to focus on maintaining our strategy of profitable growth to maintain margins to ensure we can invest on an ongoing basis as technology adaption cycles continue to get shorter," he added.
Mahalingam is scheduled to retire in February, 2013. Rajesh Gopinathan, vice president of business finance at TCS, will replace Mahalingam. He has been appointed as the deputy CFO effective today.
In July-September, TCS added 41 new clients. The software exporter also hired 18,654 employees on a gross basis. TCS reported its lowest attrition rate, 11.4 per cent, in the last 10 quarters. The company's utilisation rate excluding trainees was 81.6 per cent.
Today, TCS shares ended at Rs 1,290 on the National Stock Exchange (NSE), down 1.3 per cent from Thursday's close.