UPDATE: TCS Q4 net jumps 50% YoY

India's largest IT services provider, Tata Consultancy Services, posted a 50.1 per cent jump in its net profit (consolidated Indian GAAP) at Rs 2,001 crore for the quarter ended March 31, 2010 as compared to the same period a year ago. Its revenue, too, jumped 7.9 per cent to touch Rs 7,738 crore year on year (YoY).

On a sequential (quarter on quarter or QoQ) basis, TCS' net profit jumped 9.7 per cent while its revenue increased by 1.17 per cent. In dollar terms (consolidated US GAAP), TCS performed even better. Its revenue was up 17.61 per cent YoY and 3.07 per cent QoQ while its net profit rose by 59.69 per cent YoY and 9.69 per cent QoQ. TCS also closed 10 large deals in the quarter under review.

For the full year (FY2009-10),  the company's net profit at Rs 7,001 crore was up 33 per cent while its revenues at Rs 30,029 crore was up 8 per cent YoY.

TCS does not provide guidance. However, N Chandrasekaran, CEO and MD said: "Our sales and execution machine is primed and we have laid a solid platform for growth. There is significant traction for our strategy of full services which together with our global engagement model positions us well for accelerated growth.”

For the full year, TCS registered a strong volume growth of 17 per cent during the year which Chandrasekaran described as "an exceptional year for TCS".

S Mahalingam, Chief Financial Officer and Executive Director, attributed the success in the fourth quarter to "our focus on superior project execution and efficient utilisation of experienced professionals". He added that despite strong currency headwinds, sustained cost efficiencies and treasury management helped improve operating margins and net margins sequentially.

The company's operating profit margin (OPM) was up 51 basis points (bps) sequentially at 28 per cent.

“In FY10, we have been through an entire business cycle where controlled hiring in the first two quarters gave way to rapid recruitment in the last two quarters. We have made 20,000 campus offers for FY 11,” said Ajoy Mukherjee, Vice President, Head, Global Human Resources.
 
Attrition rates continued to be stable at 11.8 per cent on a LTM basis. Overseas nationals formed over 10,700 or 6.7 per cent of the total employee base with employees from 80 different nationalities. The average age of a TCS employee is 28 yrs; 57 per cent of the workforce has more than 3 yrs experience; and 30 per cent of the company's workforce comprises women.

Q4'10 highlights:

• Q4 Revenues at Rs 7,738 crore -- up 7.9% Y-on-Y and 1.17% Q-on-Q
• Volume Growth at 4.0%
• Operating Profits at Rs 2,165 crore -- up 29.1 % Y-on-Y; 3.0% Q-on-Q
• OPM up 51 bp sequentially at 28.0%
• Net Profit at Rs 2,001 crore -- up 50.1 % Y-on-Y and 9.7% Q-on-Q; Net margin up 201 bp sequentially at 25.9%
• gross addition of 16,851 professionals in Q4; Net addition of 10,775 employees
• Attrition rate at 11.8 % LTM
• EPS at Rs. 10.15 in Q4 from Rs. 9.3 in Q3

FULL YEAR RESULTS: Highlights for Financial Year 2009-10

Shareholder Highlights

• FY10 EPS at Rs 35.67
• Total FY10 Dividend at Rs 20 per share including Rs 4 as Final Dividend and Rs 10 per share as Special Dividend (proposed)
• Total Dividend Payout Ratio at 65.6%

Business Highlights:

• Volume growth at 17%
• FY10 Operating Profits at Rs 8,018 cr up 21.91%;  Operating Margins up 304 basis points at 26.7%
• Net Profits at Rs 7,001 crore up 33%; Net Margin up 441 basis points at 23.3%
• Gross addition of 38,063 professionals; net addition of 16,668 professionals
• Total employee strength: 160,429