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IT services major Tata Consultancy Services posts Rs 5,333 crore net profit in third quarter

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Mumbai –  IT services major Tata Consultancy Services today posted a better than expected growth of 50.3% in consolidated net profit at Rs 5,333 crore for the third quarter ended December 31, aided by sectors like life sciences, manufacturing and improved business in Europe.

The country’s largest software services exporter had reported a net profit of Rs 3,550 crore in the year-ago period, as per a BSE filing citing Indian GAAP figures.

Net profit as per Indian IFRS rose by nearly 50% to Rs 5,314 crore in the third quarter as against Rs 3,549.62 crore in the corresponding period in the previous year.

Consolidated revenues of the city-based firm rose by 32.5% to Rs 21,294 crore in the October-December quarter this fiscal compared to Rs 16,070 crore in the same quarter of 2012-13 fiscal.

TCS chief executive officer and managing director N Chandrasekaran described the quarter as a “very good one”.

Quarter-on-quarter (q-o-q) in rupee terms, TCS net profit rose by 15.1% and revenues were up by 1.5%.

“Strong international demand for our services and discipline in execution has helped TCS maintain its momentum and post robust growth in volumes as well as realisation,” Chandrasekaran said.

He said the company signed eight large deals in the quarter but was not so optimistic about the domestic market till June or September.

He also described the margins above their estimate of 27% and attributed the good numbers to lower forex losses.

International business grew by 3.8% in dollar terms, he said, adding that attrition stood at 10.9% during the quarter.

The diversified market presence and services portfolio has helped the company overcome seasonal weakness and soft demand in the Indian market, he added.

Buoyed by the results, TCS also increased its hiring target for 2013-14 fiscal by 5,000 to 55,000.

In US dollar terms, net income rose by 31.7% to $858 million in the third quarter of the current fiscal against $652 million in previous fiscal, while revenues were up by 17% to $3.44 billion against $2.95 billion during the same period.

Sequentially in dollar terms, net profit rose by 14.7% and revenues were up by 3%.

“Growth in Q3 was driven by industries like Life Science & Healthcare, Manufacturing, Media, Travel & Hospitality and Telecom.

The company’s broad based presence across markets and services helped overcome seasonal weakness in some markets. Europe led growth, driven by the continuous investments being made in that market, while North America and UK also grew during the quarter,” TCS CFO Rajesh Gopinathan said.

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