Asia''s largest IT services company, has announced first
quarter results which are modestly above analyst expectations.
The company managed strong volume growth during the
quarter and is very positive about sustaining it in
the coming quarters, though margins are under pressure.
the quarter ended 30th June, 2006, TCS has reported
a consolidated net profit of Rs882.66 crore, an increase
of 35 per cent over Rs653.85 crore reported for the
same quarter of the previous year. On a quarter-on-quarter
basis, net profits have increased 6.06 per cent from
Rs832.12 crore for the quarter ended March 2006.
revenues have increased 46.27 per cent for the quarter
to Rs4,227.19 crore, from Rs2,890.01 crore for the previous
year quarter. On a sequential basis, revenues have gone
up 13.96 per cent from Rs3,709.12 crore for the March
profits for the quarter increased 30.97 per cent from
the previous year quarter and 7.88 per cent from the
March 2006 quarter. Operating margins as a percentage
of total revenues declined considerably to 25.02 per
cent during the quarter, as compared to 28.28 per cent
for the previous year''s quarter, and 26.75 per cent
for Q4 2005-06.
decline in operating margins was mostly on account of
rising employee costs. Salary costs increased 142 per
cent over the previous year quarter and 22.63 per cent
sequentially. Total operating expenses increased 52
per cent year-on-year, and 16.19 per cent sequentially.
line with the general industry trend, TCS has also seen
revenues from the Americas decline to 53.2 per cent
of total revenues from 57.9 per cent for the previous
year quarter. Revenues from Europe, including UK, increased
to 27.7 per cent from 22.1 per cent. Domestic revenues
declined to 10.6 per cent from 13.3 per cent.
revenues increased modestly to 38.1 per cent from 37.1
per cent for the previous year quarter and 37.3 per
cent for Q4 2005-06. The contribution of revenues from
time and material contracts has gone up to 56.4 per
cent from 49.3 per cent for the previous year quarter
and 51.7 per cent for March 2006 quarter.
terms of services, contribution of enterprise solutions
increased to 25.3 per cent, from 20.5 per cent for the
previous year quarter, while contribution of application
development and maintenance declined to 68.9 per cent
from 73.1 per cent. Banking, Financial Services and
Insurance (BFSI) remains the largest vertical, contributing
41.2 per cent of consolidated revenues.
added 62 new clients during the quarter and the number
of clients contributing over $1 million has gone up
to 258. TCS now has 10 clients who contribute over $50
million each to revenues per annum.
concentration has declined, with the contribution of
largest client to total revenues declining to 4 per
cent from 4.7 per cent for the previous year quarter.
Contributions of top-5 and top-10 clients to revenues
have also declined during the quarter.
added a net 4,698 employees during the quarter, taking
the total employee strength to 71,190. Attrition rate
inched up to 10.6 per cent from 8.2 per cent for the
previous year''s quarter, and 9.9 per cent for the March
2006 quarter, but still remains way below industry average.
increased salaries by an average of 15 per cent during
the quarter. Employee utilisation rate, including trainees,
has improved to
77.3 per cent during the latest reporting quarter, from
74.8 per cent for the previous year quarter, and 75.8
per cent for the March 2006 quarter.