TCS Q2 net surges 35% to Rs 4,633 crore

TCS Q2 net surges 35% to Rs 4,633 crore

Tata Consultancy Services (TCS) on Tuesday reported its consolidated financial results as per Indian GAAP for the quarter ended September 30, 2013 with a net profit of Rs 4,633.33 crore, an increase of 34.91 per cent over the same quarter last fiscal at Rs 3,434.37 crore.

TCS’ consolidated total income during the quarter under review increased 31.36 per cent to Rs 20,951.53 crore as compared with Rs 15,949.08 crore in the quarter ended September 30, 2012.

TCS Managing Director and Chief Executive Officer N Chandrasekaran said, “We have demonstrated all-round strong growth across markets and industries — life sciences, media, energy and utilities and BFSI, highlighted by efficient and rigorous execution. Our ongoing investments in industry-led solutions and efforts to provide insights and articulate the relevance of the digital revolution to business is helping us gain mindshare with customers.”

He sees a robust demand pipeline across markets and a unique opportunity to strategically partner and participate with clients.

India’s largest IT services exporter during this quarter added three $100 million plus clients which currently stands at 22 as compared from 19 in the June quarter, the company release pointed out.

With this, TCS has beaten D-Street expectations where most analysts on an average expected the company to report net profit at Rs 4,527 crore on revenues of Rs 20,850 crore for the quarter.

The standalone results of TCS showed a net profit of Rs 5,607.75 crore for the September-quarter this fiscal as compared with Rs 3,733.58 crore in the same quarter of last fiscal. Standalone total income of TCS stood at Rs 18,121.35 crore for the quarter ended September 30, 2013 whereas the same was at Rs 13097.75 crore for the quarter ended September 30, 2012. Dollar revenues grew 5.4 per cent Q-o-Q to $3,337 million in September quarter, which was in line with analysts’ forecast of $3,339 million. All core markets grew smartly with Europe, North America and UK leading the pack, TCS said in its filing.

On the business highlights for the quarter, TCS said its gross employee addition is 17,362 which takes its total headcount at 285,250. Its utilisation level stands at 83.4 per cent (excluding trainees) and 75 per cent including trainees.

Earnings before interest and tax (EBIT) soared over 30 per cent sequentially to Rs 6,329 crore and operating profit margin surged 317 basis points to 30.2 per cent.
“Strong volumes, currency tail winds and firm execution helped us post industry-leading operating margins in this quarter,” TCS Chief Financial Officer Rajesh Gopinathan said. Its operating margin stood at 30.1 per cent, while earnings per share (EPS) at Rs 23.63.

Being an export-oriented company with over 83 per cent of the revenue from the US and Europe, TCS serves as a hedge for investors against weakening trend in the domestic economy, say analysts.

In addition, considering its relatively faster pace of revenue and profit growth in the last nine quarters, TCS is in a position to benefit more from the depreciating rupee against major currencies, analysts added.

Meanwhile, the TCS board at its meeting on Tuesday declared a 2nd interim dividend of Rs 4 per Equity Share of Re 1 each of the company.

Ahead of the Q2 results, TCS scrip closed the day at Rs 2,218.15, up 0.16 per cent on the Bombay Stock Exchange.

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