TCS posts 43.6-per cent growth in Q4 net
Hindu Business Line — April 17, 2007

Better pricing, increased offshoring and cost control has helped Tata Consultancy Services report a 43.6 per cent growth in net profit for the fourth quarter of fiscal 2007.

The company's consolidated net profit for the quarter amounted to Rs 1,195 crore, up from Rs 832 crore in the corresponding year-ago quarter.

Operating revenues for the quarter rose 38.5 per cent to Rs 5,162 crore (Rs 3,727 crore). Other income was nearly three-fold higher at Rs 104.8 crore (Rs 26.84 crore), leading to a total income of Rs 5266.9 crore, 40.3 per cent higher. Although employee costs, at Rs 2091.56 crore rose over 46 per cent, total expenditure at Rs 3,697 crore was contained, and showed a rise of only 35.3 per cent.

Pricing related growth in the fourth quarter accounted for an 89 basis point impact on earnings, which grew 6 per cent quarter-on-quarter. (Year-on-year figures were not immediately available).

For the fiscal under consideration, the company said it had crossed the landmarks of $4 billion in yearly revenues and $1 billion in operating profits. Better pricing, increased leverage from the full services play (IT, BPO and infrastructure services to the same customer) and the global network delivery model led to revenue growth, said N Chandrasekaran, head, global sales and operations.

"Our emerging high growth services are giving the company a superior quality of revenues," said S Ramadorai, CEO and MD. These services contributed 18 per cent of TCS' revenues.

Net profit for the year ended March 31, 2007, grew 42 per cent, to Rs 4212.63 crore (Rs 2966.74 crore) as profit margins, at 28 per cent, improved by 2 percentage points.

The board of TCS has recommended a final dividend of Rs 4 per share.