Tata Consultancy Services has reported a rise of 29.2 per cent per cent year-on-year in its net profit (consolidated) for the second quarter ended September 30, 2009, at Rs. 1,642.21 crore against Rs. 1,270.99 crore in the year-ago period.
Revenues went up by 6.9 per cent to Rs. 7,435.23 crore from Rs. 6,953.37 crore during the period under reference. The company added 30 new clients while 5,530 employees joined the company in the second quarter.
N. Chandrasekaran, CEO and Managing Director, has stated that the company has delivered a sterling performance during the quarter and there is an improvement in market conditions. “With our client budgets still being tightly managed, we continue to deliver higher value to customers, deepening our relationships and focussing on superior operational management,” he said. “The investments made by TCS in its market footprint and its full services offerings hold us in good stead to capitalise on emerging growth opportunities,” he added.
S. Mahalingam, Chief Financial Officer, has stated that “We have focussed on all-round cost optimisation and our sustained emphasis on operational efficiency is resulting in continuous margin improvements and financial strength”. The company’s international business grew 5.3 per cent sequentially in rupee terms and its strong market presence in the U.S. helped it capitalise on emerging U.S. recovery.
In the U.K., wins in the public sector, energy and retail helped mute continued weakness. Among emerging markets, Latin America and Asia Pacific continued to show growth rates that were above the company average.
Among verticals, the BFSI (banking, financial services, insurance) segment continued to perform strongly, leading recovery across geographies, while the life science and energy and utilities verticals recorded better than average growth with visible traction in all major markets.
The company has announced a quarterly dividend of Rs. 2 per share (Re. 1 face value).
“Given the strong performance during the quarter, we have decided to pay 150 per cent of the quarterly component of the variable pay this quarter, applicable for all eligible employees on India payroll. In order to ensure that we have resources to participate in the recovery, we plan to add 8,000 new professionals in the October-December quarter,” according to Ajoy Mukherjee, Vice-President, Head, Global Human Resources.
The attrition rate in the second quarter under review was 11.4 per cent with attrition in IT services at 10.8 per cent and BPO at 18 per cent.
Emerging markets were contributing a good proportion of international revenue, Mr. Chandrasekaran said, while stressing that there was a lot of volatility in the Indian market.
“We have closed ten large deals across verticals. Two of them are more than $100 million in value. We have got more than 20 large deals in the pipeline,” he said.
TCS signed a multi-million dollar e-commerce deal with a top U.K. retailer besides partnering a global mobile device maker with a value of $150 million over multiple years.