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TCS
net profit jumps to Rs. 1,252 crore
The Hindu — October
16, 2007
Despite concerns over the impact of the
appreciating rupee against the U.S. dollar and the sub-prime
rate crisis in the U.S. market during the quarter July-September
2007, Tata Consultancy Services (TCS) has announced
a 22.8 per cent growth in its net profit at Rs. 1,251.60
crore for the said period (Rs. 1,018.68 crore in the
year-ago period). Revenues for the quarter were up 25.4
per cent at Rs. 5,639.73 crore (Rs. 4,494.83 crore).
The operating profit was at Rs. 1,478.69 crore (Rs.
1,254.36 crore).
The company provided Rs. 8.56 crore (Rs 1.73 crore)
for interest, Rs 134.53 crore (Rs 102.86 crore) for
depreciation and Rs 204.45 crores (Rs 154.3 crores)
for tax. Other income was at Rs 122.09 crores (Rs 16.42
crores). For the half year ended September 2007, the
net profit was up 29 per cent at Rs. 2,455 crore on
25.3 per cent higher total revenues of Rs. 10,843 crore.
Leadership position
Addressing the media here on Monday, S. Ramadorai,
CEO and Managing Director, TCS said, “we have underlined
our leadership position by earning revenues of $2.7
billion in the first half of this financial year by
accelerating our growth rate and improving our profitability
in the second quarter. Our strategic investments in
new services like consulting, infrastructure and platform-based
BPO as well as new markets are helping accelerate growth
and diversify our revenue base, thereby reinforcing
our full service capability.”
S. Mahalingam, CFO, TCS, said, “our focus remains
on twin pillars of growth and profitability. In the
second quarter, we have absorbed the impact of the rupee
appreciation and improved our profitability. We remain
confident that our hedging programme and cost management
levers will help us expand margins during the rest of
the year.”
The company’s operating profit margin was at 24.85
per cent (24.95 per cent) and according to Mr. Mahalingam,
the company is “as we said earlier, we are well
on way to sustaining operating profit margins.”
Landmark quarter
“This has been a landmark quarter with our
full services strategy coming of age and more than 50
per cent of the revenue in the second quarter coming
from the non-ADM (Application Development and Maintenance)
services including consulting, BPO and infrastructure
services, which are all growing at double digit rates,”
said N.Chandrasekaran, COO, TCS. In dollar terms, TCS’s
revenues grew by 10.8 per cent during the second quarter
driven by a strong growth in banking and financial services,
telecom and manufacturing verticals.
Attrition rate
During the second quarter, TCS added over 12,000
employees and remains on target to meet its annual hiring
plans and became the first Indian IT company to cross
the one lakh employee-mark.
TCS’s attrition rate was steady at 11.5 per cent
overall with 10.9 per cent in IT services and 17.9 per
cent in BPO.
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