TCS: Sharp cross currency movements have impacted dollar revenues

Tata Consultancy Services India's top information technology exporter, has reported a 5.1 per cent increase in net profit for the October-December 2014 quarter at Rs5,441 crore compared to Rs5,197 crore in the corresponding period last year. The company also announced a dividend of Rs 5 per share.

Net Profit at Rs5,441 crore showed a sequential increase of 2.9 per cent compared to the previous quarter (July-September 2014).

Operating profit for the quarter stood at Rs6, 624 cores, showing a growth of 4.6 per cent year-on-year and a 3.6 per cent sequential growth.

TCS said its operating margin stood at 27 per cent while earnings per share were Rs27.79. Dividend per share stood at Rs5.

''We have maintained our momentum in a traditionally weak quarter for the IT industry. In constant currency terms, we have seen significant growth in USA, Europe as well as emerging markets like Latin America and Middle-East Africa. Our diversified industry portfolio and presence across key markets have helped us overcome soft seasonal demand in some sectors,'' chief executive officer and managing director N Chandrasekaran said.

''Based on our progress this quarter, we are well on our way to post industry-leading growth for FY15. In areas like Digital, Simplification and Governance, we continue to partner closely with customers to help them prepare their businesses to succeed in an economy where the default is digital,'' he added

During the quarter, the company added one $100 million plus client, three $50 million plus clients and twenty $5 million plus clients.

Despite issues regarding sacking of over 2,000 employees at different centres, TCS said the company continued to hire to support business growth. There was a total gross addition of 16,561 people (net addition of 4,868 employees) taking the total employee strength to 318,625 on a consolidated basis.

The attrition rate (LTM) was at 13.4 per cent.

Revenues in Q3 came mainly from sectors like telecom, Hi-Tech and life sciences. Growth was mainly in Europe, driven by fresh investments, while North America also generated more revenues during the quarter.

''Our effort to push the bar on utilisation continues with the rate crossing 86 per cent without trainees and 82 per cent with trainees. Our hiring continues to support strong business growth, we are likely to exceed our hiring target for the current financial year,'' said Ajoy Mukherjee, executive vice president and global head, human resources.

Among emerging markets, Latin America and MEA recorded strong growth.

Among services, Global Consulting, Asset Leveraged Solutions, Infrastructure Services and Assurance Services were the leaders.

''Sharp cross currency movements have impacted dollar revenues, but we continue to manage operations with discipline and rigour while investing in people, capabilities and infrastructure on an ongoing basis,'' said Rajesh Gopinathan, chief financial officer.