Tata Consultancy Services Ltd (TCS), the country’s largest software services firm beat expectations with 34.9 per cent rise in net profit for the second quarter with equally strong increase in revenue and highest volume growth in last nine quarters.
Net profit rose to Rs 4,633 crore, up 20.7 per cent sequentially and 34.9 per cent over the year ago period. Operating profit grew 51.1 per cent over Q2 of FY13 and 30.1 per cent over the first quarter ended June 30, 2013.
Revenue at Rs 20,977 crore rose 16.6 per cent sequentially and 34.3 per cent over the year ago period.
Growth in Q2 was broad-based with all industries contributing to the performance. Growth was led by Life Sciences, Media, Energy & Utilities and BFSI. All core markets grew smartly with Europe, North America and UK leading the pack.
There was balanced growth across IT and other service lines led by Asset Leverage Solutions, Assurance, Enterprise Solutions, Engineering Services and Infrastructure, the firm said.
“It has been another great quarter. We have demonstrated all-round strong growth across markets and industries, highlighted by efficient and rigorous execution. Our on-going investments in industry-led solutions and our efforts to provide insights and articulate the relevance of the digital revolution to business is helping us gain mindshare with customers and differentiate the TCS brand in the market,” CEO and managing director, N Chandrasekaran said.
He added that the firm continues to see a robust demand pipeline across markets.
Rajesh Gopinathan, CFO of TCS, said: “Strong volumes, currency tailwinds and firm execution helped us post industry-leading operating margins in this quarter. Our ability to manage operations with a degree of discipline has helped maintain the tempo of investments needed to sustain growth as well as provide superior shareholder returns.”
The firm reported gross employee addition of 17,362 which took the total headcount to 285,250. It had utilisation rate of 83.4 per cent (excluding trainees) and 75 per cent (including trainees). Its number of clients with over $100 million contracts increased to 22 from 19.
TCS, the largest firm in India by market capitalisation, saw its share price rise 0.16 per cent to Rs 2,218.15, a record high on BSE in a weak Mumbai market on Tuesday. The results were declared after trading stopped for the day.
Last week, India’s second largest software services exporter Infosys missed analysts’ earnings expectations for the second quarter ended September 30 after reporting 1.6 per cent growth in its net profit which rose to Rs 2,407 crore, over the year ago period. This was despite a strong revenue growth of 31.5 per cent to Rs 12,965 crore during the same period.
Indian IT services exporters are seeing high growth in revenues due to sharp depreciation of Indian currency which inflates dollar term revenues when converted into Indian rupee.