TCS posts steady growth in second quarter

Beating market estimates, Indian IT bellwether Tata Consulting Services (TCS) Thursday reported consolidated net profit of Rs.5,288 crore for the second quarter (July-September) of this fiscal (2014-15), registering a 13.6 percent growth from Rs.4,654 crore in the like period a year ago and 4.6 percent growth sequentially from Rs.5,058 crore a quarter ago.

Similarly, the global software major's consolidated revenue increased to Rs.23,816 crore for the quarter (Q2) under review, posting 13.5 growth from Rs.20,977 crore in the same period a year ago and 7.7 percent sequentially from Rs.22,111 crore quarter ago, under the Indian financial accounting standard.

Under the International Financial Reporting Standard (IFRS), net income rose to $872 million, which is 17.8 percent up year-on-year (YoY) and 3.2 percent up sequentially, while revenue grew 17.7 percent YoY and 6.4 percent sequentially to $3.93 billion.

Volume growth was 6.1 percent during the quarter.

Operating profit grew 10 percent sequentially to Rs.6,394 crore and operating margin to 26.8 percent.

Under IFRS, operating profit grew 4.8 percent annually and 8.6 percent quarterly to $1,055 million.

"Driven by strong volume growth and robust utilisation rates, this has been a quarter of steady, consistent performance. Our solid showing has been marked by broad-based growth in key markets, industries and services," TCS chief executive N. Chandrasekaran said in a statement.

Utilisation rate went up to 86.2 percent excluding trainees and 81.3 percent including trainees.

"Our customers are focused on using digital technologies to re-imagine their business in multiple dimensions. With investments and capabilities in these domains, we remain well-positioned to act as a catalyst and enable their business innovation across the enterprise," Chandrasekaran added.

The company added four $50-million account and nine $20-million account clients in the quarter.

"Growth was broad-based sequentially. Integration of the merged entity in Japan provided impetus to manufacturing and hi-tech units. Core markets like North America, Europe and Britain grew smartly while emerging markets remained volatile, with India growing and Latin America faltering," chief financial officer Rajesh Gopinathan said on the occasion.

Though the company added 20,350 people in the quarter, net addition was 8,326, as 12,024 techies quit, taking the total number of employees to 313,757 ending Sep 30 and attrition rate to 12.8 percent on annualised basis.

"We have crossed the milestone of employing 100,000 women professionals with a gender diversity ratio of 32.9 percent during the quarter, as diversity of talent remains a key source of strength for us," human resources head Ajoy Mukherjee said.

The company's hiring plan for this fiscal (FY15) is on track to build a talent pipeline in line with business demands.

The company's blue chip scrip with a face value of Re.1, however, declined Rs.45.15 to Rs.2,678.85 from an opening of Rs.2,724 and by Rs.20.85 from Wednesday's closing price of Rs.2,699.70 on the Bombay Stock Exchange (BSE) before the results were declared.