Strong Q-o-Q performance, big wins drive growth momentum (Indian GAAP)
October 11, 2005

Tata Consultancy Services (BSE: TCS.BO, NSE: TCS.NI) reported its consolidated financial results according to Indian GAAP for the quarter ended September 30, 2005.

Highlights for quarter ended September 30, 2005

• Total income at Rs 2,982.60 crore ($677.63 million) up by 10.2 per cent Q-on-Q.
• Net profits at Rs 693.71 crore ($157.61 million) up by 10 per cent Q-on-Q.
• EPS up from Rs 13.13 in Q1 to Rs 14.45 in Q2.
• 74 new clients added in Q2.
• 5,596 associates joined the company in Q2.
• TCS becomes the first Indian IT services company to employ 50,000+ professionals.
• TCS named best IT employer by Data Quest for the second consecutive year.
• Second interim dividend of Rs 3 per share announced.

Strong ramp-ups with existing clients in North America, new client acquisitions across verticals and large outsourcing wins helped the company post a stellar quarterly performance with excellent growth momentum for the future.

TCS reported a total income for the quarter ended September 30, 2005 at Rs 2,982.60 crore ($677.63 million) versus Rs 2,448.19 crore ($ 532.10 million) for the corresponding quarter last fiscal. Profit after tax stood at Rs 693.71 crore ($157.61 million) for the quarter ended September 30, 2005 versus Rs 574.76 crore (before one off item, $124.92 million) for the corresponding quarter last fiscal.

Commenting on the company's performance in Q2, CEO and MD of TCS, S Ramadorai said: "The significant client acquisitions we have had in the previous quarters have resulted in excellent ramp-up and growth during the quarter. TCS' global delivery cum consulting led growth strategy has gained full market validation with the number of significant wins we have had this quarter. Our ability to manage complex technology engagements on a global scale will continue to be a growth driver," he added.

Big wins

• A US $250m + global engagement with ABN AMRO set the new benchmark for outsourcing deals to India. The pioneering efforts of TCS' Global Delivery Model again came to fruition.
• In India, Tata Teleservices outsourced IT operations and applications to TCS in a contract worth US$250m.
• A leading US retailer selected TCS as its strategic IT partner on a multi-year contract.
• Two large US insurance providers selected TCS as their strategic partner during the quarter.
• A leading global bank selected TCS as its partner in Latin America in a multi-year, multi-million dollar deal.
• One of the largest engineering, construction and oil-field services company selected TCS for providing state-of-the-art GIS solutions.
  

Capturing value

The company continued its client acquisition and growth momentum across all its service segments.

	TCS' differentiated platform-based BPO strategy continued to witness strong traction and the practice added eight new clients in transaction processing during Q2 across banking, retail and, pharma verticals. Three existing clients ramped up operation and added sizable additional associates during Q2. The BPO business had 2,312 employees at the end of Q2. A new BPO centre in Chennai became operational during the quarter with a capacity of over 1,000 seats. Significant BPO deals include: A leading US retailer selected TCS for its analytics process. A major European bank selected TCS for its fixed-income process. A leading US semi-conductor equipment company selected TCS for supply chain processes.
	TCS' Asset Leveraged Solutions are offering great value to clients. TCS' products in banking, insurance and capital markets achieved critical wins during Q2. Significant product deals include: TCS' benchmark insurance product IIMS was selected by a global insurance company for its China and Korean subsidiaries and will form the platform for the client's next generation solutions for group and individual life products. A leading investment bank and brokerage house in Chile selected Quartz as its platform. Anti-money laundering solution finDNA was selected by two major US financial institutions. TCS' eClearSettle was selected by the National Depository Centre in Moscow.
	The company continues to leverage its strong client base in the manufacturing segment to move successfully into Engineering and Industrial Services (EIS), which added 18 new clients during Q2. Significant EIS deals include: Engineering CAM solutions for a leading UK aerospace company. Implementing its Product Lifecycle Management (PLM) strategy for the world's leading home and business audio systems company. A large producer of semiconductor equipments in North America chose TCS as its EIS partner.
	The Remote Infrastructure Management services continued to grow in strength and added 18 new clients during Q2, taking the total number of active clients to 102 at the end of Q2. Significant Remote Infrastructure Management deals include: A leading North American Bank chose TCS as its strategic partner for a host of services including server consolidation, performance management, network monitoring and data centre management. A leading UK-based global insurance company has engaged TCS for providing security and access management services. TCS will provide end-to-end infrastructure management and services for Tata Teleservices.
	TCS' Assurance Services won six new clients during Q2 with its new Testing Centre of Excellence gaining acceptance from large customers. At the end of Q2, it had 64 active customers. Significant Assurance Services deals include: Business acceptance testing for a leading financial services company in Europe. End-to-end test automation for a leading telecom equipment manufacturer in North America. Enterprise testing strategy development for a leading manufacturing company in Asia Pacific.

Delivering value

• TCS' core banking solution at State Bank of India has been successfully implemented in over 5,000+ branches. Two State Bank subsidiaries — State Bank of Patiala and State Bank of Travancore — are fully under the core banking solution.
• The core banking implementation at Indian Bank crossed the 100 branches mark during the quarter.
• TCS successfully implemented its depository and clearing solution eClearSettle for a Middle-Eastern financial exchange. This is considered as an international benchmark for end-to-end deployment timeline.
• TCS successfully implemented an end-to-end business transformation programme for a leading insurance company in North America.
• TCS defined and implemented a data warehouse architecture to achieve process intelligence for a pharma major in the US.
• For a leading retail research company, TCS BPO delivers 300,000 reports every month with an accuracy of 99.98 per cent.
• TCS' EIS practice implemented an e-matrix based solution for a large medical equipment manufacturer to achieve FDA compliance in their manufacturing and supply chain processes.

Human Resources Update
There was a gross addition of 5,596 employees and net addition of 4,224 employees. TCS' attrition rate was 8.7 per cent for the last 12 months, the lowest in the Indian IT industry. TCS was named best IT employer for the year 2005 by Data Quest.

At the end of Q2, the total employee strength of the company was 53,329, with employees coming from 49 different nationalities. The strength of non Indian nationals increased to 3.9 per cent of the total employee base from 3.7per cent at the end of Q1. 53 per cent of TCS employees have more than three years of experience and 23 per cent are women employees.

About Tata Consultancy Services (TCS)
Tata Consultancy Services (TCS) is the world leading information technology consulting, services, business process outsourcing and engineering services organisation that envisioned and pioneered the adoption of the flexible global business practices that today enable companies to operate more efficiently and produce more value. TCS achieved this by creating and perfecting a unique method of global deployment and delivery of high quality, high value services and products in IT consulting and business process outsourcing. Known as the "Global Delivery Model," this strategic services delivery concept has reshaped the IT services industry. More than 95 per cent of TCS customers reward the company's reliability, passion, creativity, and unique ability to handle the broadest range of their IT needs by continually extending and deepening their partnerships with TCS. With over 50,000 of the world's best trained IT consultants located in 34 countries, TCS is uniquely positioned to deliver its flexible world class services seamlessly to any location. TCS reported consolidated revenues of $2.24 billion (U.S.) in the fiscal year 2004-2005. The company is listed on the National Stock Exchange and Bombay Stock Exchange in India.