Outsourcing deals push TCS Q1 net
15 July 2016
Riding on an increase in outsourcing deals, India's largest software exporter Tata Consultancy Services has posted a 9.44 per cent rise in consolidated net profit at Rs 6,318 crore for the quarter ended June 30, 2016. The Mumbai-headquartered company had posted net profit of Rs 5,773 crore for the same quarter a year ago.
The company's consolidated total income rose to Rs 30280 crore, compared with Rs 26447 crore posted during the comparable year ago period, TCS said in regulatory filing.
''Strong execution and accelerating customer adoption of Cloud, Big Data & Analytics has driven broad-based growth across key markets and industries. Our investments in platforms are gaining significant traction as customers look to boost business agility and enhance their time-to-market advantage to gain a competitive edge,'' said TCS CEO and MD, N Chandrasekaran.
''Our rising employee retention rates for three consecutive quarters reflect our focus on engagement and investments we have made to build strong digital talent base. This is paying off with over 165,000 TCSers now trained with significant expertise in new Digital technologies that are rooted in specific domains,'' Chandrasekaran added.
During the quarter, TCS posted the incremental revenues of $155 million – the highest in last seven quarters up to Q1 - driven by strong growth across core markets in North America, UK and Europe. India was the highlight among growth markets.
Adoption of Cloud, Big Data & Analytics is driving demand in Manufacturing, Energy & Utilities and Communications while front-office transformations are helping growth in Telecom and Media sectors. Consumer businesses like Retail, TTH and Life Sciences are also increasingly using analytics to create rich experiences for each customer and reimagine each unique customer's journey.
''This has been a quarter of good financial performance balancing revenue growth, profitability and cash generation. Our disciplined approach to operations have helped us counter strong headwinds in the form of annual salary hikes and promotions as well as global currency and market volatility through the quarter. We continue to invest in people, platforms and products as we look to strengthen our competitive position across key markets,'' Rajesh Gopinathan, Chief Financial Officer, said.
As of June 30 2016, the company has applied for 2,928 patents, including 67 applied during the quarter. Till date the company has been granted 385 patents.
The total employee strength at the end of Q1 stood at 362,079 on consolidated basis with gross addition of 17,792 (net addition: 8,236 employees). The total attrition rate (last twelve months) fell to 13.6 per cent including BPS. The percentage of women in TCS rose to an all-time high of 33.8 per cent, while the number of nationalities increased to 131.
"It is always a challenge for a very large organisation with a strong legacy like TCS to be as nimble - footed or agile as competitors who are smaller in size or hungrier for acquisitions. Thus while analysts continue to speculate on the relative positioning of TCS to Cognisant and Infosys in the future, the current quarterly results reaffirm that they have directionally got the strategy right,'' said Sanjoy Sen, doctoral research scholar, Aston Business School, UK.
''Future quarters will reveal whether TCS have found their optimal positioning along the stability - agility scale that will enable them to accelerate their growth faster, both organically and through acquisition, to be able to retain the top position,'' he added.