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TCS Q1 net profit rises 2.08pc to Rs 5,684 crore

Country’s largest software services firm Tata Consultancy Services (TCS) Thursday reported 2.08 per cent rise in consolidated net profit at Rs. 5,684 crore for the first quarter ended June, 2015.

The Mumbai-based firm had posted a net profit of Rs. 5,568 crore in the year-ago period, it said in a BSE filing.

The company’s consolidated revenue jumped 16.08 per cent to Rs. 25,668 crore for the April-June quarter of this fiscal from Rs. 22,111 crore for the same quarter of 2014-15 fiscal.

The figures are in Indian GAAP.

Commenting on the performance, TCS CEO and Managing Director N Chandrasekaran said demand from core markets like North America and greater traction for ‘digital’ solutions in key verticals like financial services, retail and life sciences has driven volumes and growth in the first quarter.

“Our significant investments in IP and platforms, digital capabilities and our execution track record gives us a firm foundation to capture growth in the current financial year,” he added.

The company announced an interim dividend of Rs. 5.50 per equity share of Re. 1 each of the company.

TCS’ operating margin stood at Rs. 6,724 crore in the first quarter, a growth of 13.3 per cent year-on-year (y-o-y).

It added 20,302 (gross) employees during the said quarter, taking its total headcount to 3,24,935 as of June 30, 2015.

The utilisation rate stood at 86.3 per cent, excluding trainees.

“Given the strong pipeline and market adoption of digital across industries, we are investing to train over 1,00,000 professionals this year in all relevant technologies,” Chandrasekaran said.

The company added 10 clients in the USD 20 million+ band and one client each in USD 50 million+ and USD 100 million+ bands, respectively.

“Our disciplined approach to all aspects of operations have helped maintain operating margins within our stated range despite hedging volatility and the impact of our annual cycle of salary hikes and promotions,” TCS CFO Rajesh Gopinathan said.

He added that the company continues to focus on optimising its cash conversion ratios and investing in people and technologies ahead of its business needs.

During the reported quarter, TCS posted incremental revenues of USD 136 million, driven by strong growth across core markets led by North America, UK, Europe, Middle-East and Africa and Asia Pacific, the BSE filing said.

“Growth among industry segments was led by retail, life sciences, banking, financial services and insurance, and telecom,” it added.

TCS is the first major company to announce its results for the first quarter of FY16.

Traditionally, its rival Infosys is the first large company to kick off the earnings season for BSE-listed entities in the country.

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