Net profit jumps 16% to Rs 6,085 crore
Mumbai : Country’s largest IT services exporter TCS met market expectations with an over 16 per cent rise in net profit at Rs 6,084.66 crore for the quarter to September, backed by strong performance of its digital platform and recovery in Latin America and the home market.
Tata Consultancy Services’ (TCS) order book grew 30 per cent in the quarter, the highest ever for the company, giving the indication that things are looking good, MD and CEO N Chandrasekaran said.
“We have delivered accelerated growth in constant currency terms for Q2. Driven by great execution on the ground, our broad-based performance has been led by strong sequential growth in BFS, retail and life sciences verticals with Britain and North America leading the markets,” he said.
“Our digital platform has been very high. Digital has seen tremendous traction. Our revenues from the digital platform has jumped to 13.3 per cent from 12.5 per cent quarter-on-quarter,” Chandrasekaran, who was recently given another five-year term, added. Observing that its attrition rate, which stood at 16.2 per cent in Q2, has stabilised compared to previous quarter, the company said it is working on steps to further bring it down in third and fourth quarter of the fiscal.
“Attrition in absolute number has come down compared to last year. I am quite hopeful that all the initiative we are taking to control attrition will pay out. In Q3 and Q4 the attrition is expected to come down further,” executive VP and global head Ajoy Mukherjee said.
“In India too attrition has come down compared to last quarter and month on month we have seen a decline,” he added. Meanwhile, Ravi Shenoy of Motilal Oswal Securities termed the numbers as per estimate. “Traction in digital services and solutions which forms 13.3 per cent of revenues continues to be strong with a 10.7 per cent Q-o-Q growth. Margins were better than estimates at 27.1 per cent, he said, adding the brokerage is remains neutral on the TCS counter, which closed 0.2 per cent up at Rs 2,597.40 on the BSE which main index shed 0.21 per cent today.
Meanwhile, TCS recorded a gross addition of 25,186 people, the highest for a quarter. This takes the total employee strength to 3,35,620 on consolidated basis, making it the largest employer in this domain in the country. Further, the Tata Group has further revised upwards its fiscal year-end hiring target to 75,000 from 60,000, on account of growth in last few quarters as well as to arrest attrition.
The company said core markets like North America and Europe grew smartly along with emerging markets like Latin America, India and Middle East and Africa. TCS also announced a dividend of Rs 5.50 per share. Its operating margin for the quarter stood at 27.1%.
