Total revenue rises 21 per cent to Rs 17,987 crore
An across-the-board growth in all its businesses with strong growth in revenues saw Tata Consultancy Services (TCS) report a 15.5 per cent rise in net profit over a year-ago at Rs. 3,831 crore for the quarter ended June 30, 2013.
TCS reported a strong revenue growth of 21 per cent over the same period last year at Rs. 17,987 crore, and recorded its highest volume growth in the last seven quarters at 6.1 per cent over the previous quarter. The operating profit, at Rs. 4,847 crore, rose 18.9 per cent year-on-year.
“It has been another stellar quarter,” N. Chandrasekaran, CEO & MD, TCS told a press conference. “It has been an all-round performance with strong revenue growth across markets, led by the U.S. Our investments in Europe continue to gain strong traction with customers, and helped us deliver industry-leading growth this quarter.”
On the improvement in margins, he said the company had maintained disciplined pricing.
“The industry requires a lot of investment and technology changes fast and so we need to operate at a good margin of around 27 per cent.
“Anything additional will be invested in R&D, innovation or scale up but nothing specific,” he added.
On the pick-up in the telecom sector, the TCS CEO said the first quarter was good and Q2 seemed good. “But we will still wait. We have been winning deals but would not say it is in an uptick mode.”
He said TCS’ business in India was seeing a lot of volatility due to the business mix.
“We are mainly in system integration here, and are trying to change the mix. There are currently fewer annuity contracts.”
The company grew 8.5 per cent on a sequential basis in Europe, and the deal pipeline in the U.S. and Europe is good.
TCS closed the acquisition of Alti, a leading system integrator of SAP solutions in France, and added two new $100 million clients during the quarter.
“We are seeing strong momentum in our business. The right cost structure, a customer-centric approach and increasing investments in new digital solutions and services positions us well to post another year of strong business growth,” Mr. Chandrasekaran said.
During the quarter, there was a net addition of 1,390 employees, taking total employee strength to 277,586. TCS’ utilization rate excluding trainees was at 82.7 per cent and including trainees it was 72.5 per cent.
Attrition rate fell to 10.52 per cent including BPO. In IT, the attrition rate was at 9.55 per cent, while in BPO it was at 15.77 per cent.
On the Bombay Stock Exchange (BSE), the TCS stock opened at Rs. 1,682 and scaled a 52-week high of Rs. 1,685 before closing the session at Rs. 1,660.15; down Rs. 13.8 (0.82 per cent).