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TCS reports better than expected results for third quarter |
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Tata Consultancy Services (TCS), an Indian software company, has reported its financial results for the third quarter, ended 31 December, 2009. TCS reported Q3 revenues at $1.64 billion, up 10.3% year on year and up 6.3% quarter on quarter as against the corresponding period last year. Its Q3 net profit was at $ 384 million, up 38.9% year on year and 14.2% quarter on quarter. Operating margin increased 103 basis points quarter on quarter, while net margin improves 164 basis points quarter on quarter. In its statement, TCS said superior market presence helped it leverage the global economic recovery and post sequential growth across all operating regions. It said that while the US continues to lead demand recovery, the UK and European firms are increasingly beginning to invest for the upturn. Asia Pacific (APAC) and India are seeing strong demand driven by growth in sectors like Energy, Utilities, and banking and financial services (BFSI). TCS CEO and MD, N Chandrasekaran said, "TCS yet again posts high growth and delivers on margin improvements for the third successive quarter in this difficult year. Our investments ahead-of-time in emerging markets, multiple industries and client relationships is reflected in our exemplary performance." He further added that "this validates the strength of our business model and highlights our differentiated strategy." The company recorded positive business growth across all verticals, continuing its leadership position across a wide range of industry segments. Demand recovery that started in the BFSI segment has now become more broad-based, with Telecom and Technology also posting healthy growth. Strong client additions supported above-average revenue growth in the Energy and Utilities space. It reported volume growth of 6.6% sequentially, announcing a quarterly dividend of Rs 2 per share EPS at $ 0.20 in Q3. S. Mahalingam, Chief Financial Officer, said, "We have continued to leverage all the margin improvement levers very effectively to deliver growth with higher profitability. This has been achieved in spite of significant currency head-winds." In terms of human resources, Ajoy Mukherjee, Vice President, Head, global human resources said, "We have had significant employee additions this quarter and still, have increased our talent utilization to industry leading levels. We remain prepared to meet the growth in demand.” Q3 saw a gross addition of 12,854 employees (net addition of 7,692), even as utilization improved to 81.1% (excluding trainees) and 77.2% (including trainees). The attrition rate in Q3 was at 11.5% with attrition in IT Services at 10.8%% and BPO at 18.3%. |
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