TCS scales record high after good Q1 earnings

TCS rose 3.3% to Rs 1,715 at 9:16 IST on BSE after consolidated net profit rose 5.9% to Rs 3831 crore on 9.5% growth in revenue to Rs 17987 crore in Q1 June 2013 over Q4 March 2013.

The Q1 result was announced after trading hours on Thursday, 18 July 2013.

Meanwhile, the S&P BSE Sensex was up 61.13 points or 0.3% at 20,189.54.

On BSE, 33,000 shares were traded in the counter as against average daily volume of 1.30 lakh shares in the past two weeks.

The stock hit a high of Rs 1,720 so far during the day, which is a record high for the counter. The stock hit a low of Rs 1,700 so far during the day.

TCS' consolidated operating profit rose 12% to Rs 4847 crore in Q1 June 2013 over Q4 March 2013.

TCS said growth in Q1 June 2013 was seen across all industry segments, led by life sciences, retail, telecom and BFSI. There was balanced growth across IT and other service lines led by Assurance, EiS, Global Consulting and Asset Leveraged Solutions. Major markets grew smartly led by USA, Europe and UK alongside growth in emerging markets like Latin America and Asia Pacific, TCS said in a statement. The company added two new $100 million clients in Q1 June 2013.

During the quarter, TCS closed the acquisition of Alti, one of the top 5 system integrators of SAP solutions in France with several top French corporations in the banking, financial services, luxury, manufacturing and utilities sectors as its key customers.

TCS said it continued to hire employees to support business growth. There was a total gross addition of 10,611 people and net addition of 1,390 people in Q1 June 2013, taking the total employee strength to 277,586 on a consolidated basis. The utilization rate (excluding trainees) was at 82.7% and that including trainees was 72.5%. The attrition rate (LTM) dropped further sequentially to 10.52% including BPO. The attrition rate in IT was at 9.55%, while BPO attrition was higher at 15.77%.

Commenting on the Q1 performance, TCS Chief Executive Officer and Managing Director N Chandrasekaran said: "We have delivered another solid quarter, driven by the highest volume growth in the past seven quarters. It has been an all-round performance with strong revenue growth across markets led by the US. Our investments in Europe continue to gain strong traction with customers and helped us deliver industry-leading growth this quarter. Strong momentum in our business, the right cost structure, a customer-centric approach and our increasing investments in new digital solutions and services positions us well to post another year of strong business growth".

TCS Chief Financial Officer Rajesh Gopinathan said: "The current environment demands an agile operating model that can capture diverse growth opportunities. We continue to execute to plan and invest for growth, while maintaining stability in our margin profile".

TCS is an IT services, consulting and business solutions organization. It offers a consulting-led, integrated portfolio of IT, BPO, infrastructure, engineering and assurance services.

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