We are very confident that 2013-14 will be a better fiscal: N. Chandrasekaran

A broad-based growth across several industry verticals and geographies saw Tata Consultancy Services (TCS), the country’s largest software services exporter, on Monday, report a net profit of Rs. 3,552 crore (consolidated) for the third quarter of 2012-13 against Rs.2,803 crore in the same quarter last year. This represents a growth of 26.7 per cent over the same quarter last year.

During the quarter, TCS’ revenue grew 21.7 per cent to Rs. 16,070 crore (Rs. 13,204 crore) and the operating income was up 13.4 per cent at Rs. 4,381 crore. Operating margin was at 27.25 per cent while the net profit margin rose 25 basis points to 22.1 per cent.

Addressing a press conference, N. Chandrasekaran, CEO & MD, TCS, said: “We have had an excellent quarter of well-rounded performance and have driven a higher quality of revenue and increased profitability through focus on productivity and innovation. We believe that clients are going to invest in making their operations ‘digital-ready’ in 2013 and drive business growth. We are very confident and reiterate that 2013-14 will be a better fiscal.’’

“The overall performance has been in line with what we had outlined at the beginning of the year,” said S. Mahalingam, CFO and Executive Director. “Our superior execution in this seasonally weak quarter has delivered productivity gains and an expanded operation margin. We are in line with maintaining our operating margin at 27 per cent levels.”

Mr. Chandrasekaran said that, during the quarter, there were issues regarding business volume and it grew 1.25 per cent. “The first issue was regarding lesser working days due to more holidays but the second unusual phenomenon was of furloughs which affected the financial services sector this quarter.”

The U.S. business grew 2.5 per cent, U.K. at 5.2 per cent and Latin America at 11 per cent. “The domestic market is volatile and can swing as per signings during a quarter,” he said. Although at a global macro economy level, recovery had been slow, ``the US is doing better and actions have been taken in Europe. We are now operating in a much clearer environment and so there is a huge opportunity in technology adoption which we can take advantage of,” Mr. Chandrasekaran said. At the end of the quarter, TCS’ employee strength was at 263,637, with a gross addition of 17,145 employees and a net addition of 9,561 employees. The overall attrition was 11.2 per cent with IT services at 9.8 per cent (the best ever for the company) and BPO at 22.3 per cent. “We hired 49,600 professionals in the first three quarters of this financial year against our annual target of 50,000,” said Ajoy Mukherjee, Executive Vice president and Head, Global Human Resources.