Weak rupee, new deals help TCS Q2 net grow 34% to Re 4700 cr

Revenue jumps to Rs 20,977 cr from Rs15,620 cr in the corresponding quarter last fiscal  “We continue to see a robust demand pipeline across  markets and a unique opportunity to strategically partner and participate with clients as they re-imagine their future in multiple dimensions.”– N Chandrasekaran, TCS CEO and MD

Weak rupee, new deals help TCS Q2 net grow 34% to Re 4700 cr

New Delhi : Backed by large deal wins and currency depreciation, country’s largest software exporter TCS on Tuesday reported 34% rise in consolidated net profit at Rs.4,702 cr for the July-September, as against a profit of Rs.3,512 cr, for the corresponding period last year.

Total revenue grew 34.3% to Rs.20,977.24 cr (IFRS) in the second quarter of the current fiscal from Rs.15,620.75 cr in the corresponding quarter last fiscal, Tata Consultancy Services (TCS) said in a filing to the BSE after close of market hours. All these numbers are according to IFRS standards.
“We continue to see a robust demand pipeline across markets and a unique opportunity to strategically partner and participate with clients as they re-imagine their future in multiple dimensions,” TCS CEO and MD N Chandrasekaran said.
The IT major signed eight large deals, including two each in BFSI and telecom segments, during the quarter, its CFO Rajesh Gopinathan said.
Margins improved by over 300 basis points due to currency depreciation.
In dollar terms, consolidated profit grew by 16.4% year-on-year to $748 mn. Revenues jumped by 17% to $3.34 bn.
Banking, financial services and insurance (BFSI) and manufacturing verticals led the growth. All core geographies witnessed good demand, especially Europe, North America and the UK.
“As the industry benefited from a record flow of new contracts, TCS quarterly profit rose 34%… this is the quarter when currency depreciation of 13% have significantly boosted their profits,” said Rikesh Parikh VP – Institution Corporate Broking, Motilal Oswal Securities.
The company added three new USD 100-million clients. It also saw 7,664 employees joining the company, taking the total headcount to 2,85,250.
“Strong volumes, currency tail winds and firm execution helped us post industry-leading operating margins in this quarter,” Gopinathan said.
Meanwhile, TCS shares rose to 52-week high of Rs.2,258 in anticipation of robust earnings, but ended the day flat at Rs.2,218 apiece.
According to Indian GAAP standards, TCS consolidated net profit jumped 35% to Rs.4,633.33 cr for the quarter under review, from Rs 3,434.37 crore the same period last year.
“We have demonstrated all-round strong growth across markets and industries highlighted by efficient and rigorous execution,” Chandrasekaran added.
Commenting on the results, Ankita Somani, Research Analyst (IT), Angel Broking said: “TCS yet again reported robust set of results for Q2, FY2014 … Volume growth was whopping at 7.3 per cent quarter-on-quarter (highest in last eight quarters).”
The EBIT margin of TCS grew by 315 basis points (3.15%) to 30.2%, largely aided by sharp rupee depreciation, she said. “With this level of operating margin, now the margin gap between TCS and Infosys have widened by more than 600 basis points,” she added.
Infosys, the country’s second largest IT company, had reported a 1.6 per cent rise in consolidated net profit to Rs 2,407 crore for the September quarter. Consolidated revenue was up 31.5 per cent to Rs 12,965 crore in the quarter.
TCS said its is sticking to this year’s employee addition target of 45,000 to 50,000 persons. “We are on track,” said Ajoy Mukherjee, Executive Vice President and Global Head, Human Resources of the company. The attrition rate (LTM) was stable at 10.9 per cent, including BPO. The attrition rate in IT was at 9.9 per cent, while BPO attrition was higher at 16.3 per cent, the company said.
In a separate filing, TCS said that its board has declared a second interim dividend of Rs 4 per equity share of Re 1 each of the company.

(For all the latest News, Mumbai, Entertainment, Cricket, Business and Featured News updates, visit Free Press Journal. Also, follow us on Twitter and Instagram and do like our Facebook page for continuous updates on the go)

Free Press Journal

www.freepressjournal.in