TCS beats forecast; Q1 net up 15 p.c Q-o-Q

Tata Consultancy Services Ltd, India's top software services firm by sales, posted a net profit of Rs 1534 crore, a rise of 15 per cent Q-oQ and 19 per cent Y-oY, for the quarter ended June 30, 2009, as per Indian GAAP.

While the revenue for the reporting quarter stood at Rs 7207 crore, up 0.5 per cent Q-o-Q and up 12 per cent Y-o-Y, the earning per share (EPS) stood at Rs 7.83, up 15 per cent Q-o-Q and up 12 per cent Y-o-Y. For the previous quarter the EPS was Rs 6.81. TCS also announced a dividend of Rs 2 per share.

A Reuters poll of brokerages had forecast a net profit of Rs 1273 crore for the company which counts Citigroup, General Electric, General Motors, Lloyds TSB, and French insurer AXA SA among its main clients.

The company added 26 new clients and there was also a gross addition of 2,828 employees.

TCS chief executive officer and managing director, S. Ramadorai said that in a volatile and uncompromising environment, TCS has demonstrated its industry leadership by seizing opportunities for growth through operational excellence.

"While we remain vigilant about the environment, TCS is leveraging its global presence and the investments made in developed and emerging markets to deliver our proposition of certainty, which resonates clearly with customers in these challenging times and helps us create long-term value for shareholders," he said.

S. Mahalingam, chief financial officer and executive director, said the focus has been on managing the business with optimal efficiency, while investing for future growth.

"By maintaining rigor in pricing deals, managing employee and non-employee costs, collecting and conserving cash and moving work off-shore, we have achieved significant improvement in our margins and earnings per share."

According to N. Chandrasekaran, chief operating officer and executive director, TCS' discipline in execution and agility on the ground as well as its ability to remain close to the customer has enabled the company to deliver volume growth with enhanced profitability in this quarter.

"The strategic investments made in our full services capability, a global network of delivery centers, emerging markets continues to position us well going forward," he observed.

While TCS said it is watchful of the weak global economic scenario, it also observed that some stability is returning to BFSI and retail. However, the growth of other sectors depend on economic recovery.

Among service lines, application and outsourcing services continued to maintain revenue share despite slowdown in new deals, said TCS.

The share of revenue from the top 10 clients grew to 28 per cent of revenues from 26.8 per cent in the previous quarter and customers continued to migrate to higher revenue bands.