TCS, the country's largest IT services company, has announced fourth quarter and full year 2005-06 results, which are ahead of market expectations. The company has also offered a pleasant surprise in the form of a one for one bonus issue as well.
For the full year 2005-06, TCS has made a net profit of Rs2,966.74 crore or Rs60.63 per equity share on a consolidated basis, a growth of 50.07 per cent as compared to the previous year figure of Rs1,976.9 crore or Rs47.37 per equity share.
Consolidated revenues for the year 2005-06 were higher by 35.98 per cent to Rs13,386.23 crore as compared to Rs9,844.6 crore for the previous year.
Consolidated results include the financial results of subsidiary CMC. The current year results include the numbers of companies like Tata Infotech which were merged with TCS. Hence, the results may not be strictly comparable with that of pervious year though the contribution of the merged companies is low.
On a standalone basis, TCS has reported a net profit of Rs2,716.87 crore or Rs55.53 per equity share, a growth of 48.35 per cent as compared to Rs1,831.42 or Rs43.1 per share for the previous year.
Standalone revenues for the year increased 38.9 per cent to Rs11,282.81 crore from Rs8,122.81 crore for the previous year.
For the fourth quarter ended 31 March 2006, the company has reported a consolidated net profit of Rs832.12 crore or Rs17.01 per equity share, a growth of 76.38 per cent as compared to Rs471.79 crore or Rs9.83 per equity share for the previous year quarter.
Consolidated revenues for the quarter increased by 44.86 per cent to Rs3,738.1 crore from Rs2,580.43 crore for the previous year quarter.
On a standalone basis, TCS's fourth quarter net profit is at Rs750.06 crore or Rs15.33 per equity share, a growth of 75.78 per cent over Rs426.7 crore or Rs8.89 per equity share for the same quarter of previous year.
Total revenues for the March quarter increased by 44.93 per cent to Rs3,077.18 crore from Rs2,123.28 crore a year ago.
When compared to the third quarter ended December 2005, standalone net profit has increased by 10.4 per cent on revenue growth of 12.8 per cent. TCS had reported third quarter net profit of Rs679.65 crore on revenues of Rs2,727.93 crore.
TCS added more than 21,000 employees during 2005-06, taking the total employee strength to over 62,000. The company has nearly 4,000 foreign nationals on its rolls, making it the largest employer of foreigners among Indian companies. The company managed to maintain its enviable track record of keeping the attrition rate below 10 per cent.
If the company's recruitment plans are anything to go by, the outlook for current year is aggressive. TCS is aiming at a gross addition of 30,500 employees for 2006-07 and it has already made more than 9,200 offers to fresh engineering graduates this year.
In the post-results media interaction, TCS management was emphatic that growth rates for the current year would be higher than the industry average. The company believes that large orders would drive revenue growth.
As a policy, TCS does not give any financial guidance for the coming quarter or year.