An all-round robust performance by all its businesses across most geographies saw IT services giant, Tata Consultancy Services (TCS) report a 35 per cent jump in net profit at Rs 4,633.33 crore (Rs 3,434.37 crore) for the second quarter of 2013-14.
``It has been another great quarter where we have demonstrated all-round strong growth across markets and industries, highlighted by efficient and rigorous execution,’’ N. Chandrasekaran, CEO and MD, TCS said.
TCS’ revenue at Rs 20,977 crore rose 34.3 per cent during the quarter and volume growth was the highest in the last nine quarters at 7.3 per cent.
Further, the TCS CEO said, ``the record growth was due to our diversified portfolio and the engine working in all markets. Deal-wise in the last few quarters, they have been well distributed.’’
TCS reported an all-time high operating margin of 30.2 per cent. ``Strong volumes, currency tailwinds and firm execution helped us post industry-leading operating margins in this quarter,’’ said Rajesh Gopinathan, CFO, TCS. ``Of the margin increase, 300 basis points was due to the currency and that was captured in the margin. Besides, operational improvement saw a benefit of about 40 basis points of which around 30 basis points were used to overcome the decline due to the Alti acquisition. Our ability to manage operations with a degree of discipline has helped maintain the tempo of investments needed to sustain growth as well as provide superior shareholder returns.’’
Alti has been integrated with TCS France. ``We are bidding together and have won our first big deal together. We will start growing after a couple of quarters,’’ Mr. Chandrasekaran said.
Regarding TCS’ India business, Mr. Chandrasekaran said it grew 6 per cent in the quarter. ``We still have to see the yo-yo effect structurally and some predictability has to come in yet.’’
On Europe, he said there was good growth across markets. ``Our pipeline is good and we now need to look at scaling up in the coming years.’’
TCS had a gross addition of 17,362 employees during the quarter taking total employee base to 285,250. The utilization was higher at 83.4 pre cent (excluding trainees) and attrition rate in IT was at 9.9 per cent while overall it was at 10.9 per cent.
The TCS CEO said the current environment globally was good for the IT sector, ``primarily because everyone is redefining their future. Many businesses are re-thinking from a digital context and there are plenty of opportunities. The demand environment continues to be robust.’’
On Tuesday, on the Bombay Stock Exchange, TCS scaled a new high of Rs 2,258 before closing lower at Rs 2,218.15.