TCS Q3 net profit rises 0.9% to Rs 6,109 crore

Says it is always open to acquisitions

India’s largest software exporter Tata Consultancy Services (TCS) reported an increase of 0.89 per cent in net profit for the third quarter at Rs 6,109.5 crore, compared with Rs 6,055.2 crore in the second quarter of the current fiscal, despite a profit warning following the floods in Chennai, during the quarter.

Revenues for the company, during the quarter, grew marginally by 1.72 per cent to Rs 27,364 crore, compared with Rs 27,165.5 crore in Q2 of FY16.

“All our industry segments have exhibited growth in a traditionally weak quarter additionally accentuated by the impact of the Chennai floods. Our international business has grown smartly in constant currency terms, with North America and Europe leading the way among major markets, and Latin America among growth markets,” TCS Chief Executive Officer and Managing Director N Chandrasekaran said.

“Digital will remain the core focus for enterprise IT in 2016, as our customers respond to competition in a global economy driven by real-time insights. With 13.7 per cent of our revenues coming from the digital business and this segment growing at a higher sequential rate, TCS is playing an impactful role in partnership with customers,” Chandrasekaran added.
Employee strength

There was a total gross addition of 22,118 people, and net addition of 9,071 employees taking the total employee strength to 3,44,691 employees on a consolidated basis. The attrition rate fell to 15.9 per cent, during the quarter.

“Our efforts to increase employee retention is working with quarterly attrition rates falling in Q3. Our hiring continues to support strong business growth and we continue to invest in building digital skills, with over 70,000 TCSers undergoing training in new technologies this year,” TCS Executive Vice President and Global Head (Human Resources), Ajoy Mukherjee said.

Open to acquisitions
According to Chandrasekaran, TCS is always open to acquisitions. “In terms of acquisition, we look for penetration of the market for a specific industry,” Chandrasekaran said, adding that US healthcare is important for the company.

The company said the number of $100 million clients increased by 1 to 34, and $20 million was up by 2 to 173.

TCS Chief Financial Officer Rajesh Gopinathan said the company has operated with rigour and discipline to deliver credible margin performance, and generated excellent cash flows in a challenging quarter with significant cross currency and other headwinds.