The Hindu : Business : TCS revenue crosses $4 b in April-Dec.

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TCS revenue crosses $4 b in April-Dec.

Net profit rises 24 p.c. to Rs. 1,179 crore in third quarter

Announces quarterly dividend of Rs. 3 per share
Adds 7,522 employees in the third quarter

— PHOTO PAUL NORONHA

CAUTIOUSLY OPTIMISTIC: S. Ramadorai (left), CEO and Managing Director, with N. Chandrasekaran, Chief Operating Officer, TCS, addressing a press conference in Mumbai on Wednesday.

MUMBAI: Tata Consultancy Services (TCS) on Wednesday reported a 24 per cent jump in net profit during the third quarter of 2007-08 as it managed to limit the impact of a rising rupee on its margins by improving efficiency and diversifying to other markets.

The net profit during October-December 2007-08 stood at Rs. 1,178.99 crore, compared to Rs. 950.52 crore in the same period in the previous year. Total income rose by 28.38 per cent to Rs. 4,941.48 crore from Rs. 3,848.83 crore in the same quarter of 2006-07.

“We are happy with our performance in this quarter. We have crossed $4 billion revenues in the first nine months, which gives us 41 per cent growth in dollar terms,” TCS CEO and Managing Director S. Ramadorai told reporters here.

Mr. Ramadorai said the company maintained its operating margins despite the appreciating rupee as it improved efficiency and pricing, besides diversifying its global network delivery model and focusing on emerging markets. The operating margins are 24.16 per cent, up by 33 basis points.

The rupee has risen more than 12 per cent in 2007 against the U.S. dollar, leaving software companies to battle the impact as a majority of their revenues come from the American market.

On a consolidated basis, the third quarter net profit rose by 18.86 per cent to Rs. 1,326.67 crore from Rs. 1,116.10 crore a year ago, while total income increased by 23.04 per cent to Rs. 6,041.98 crore from Rs. 4,910.53 crore.

The company has announced a quarterly dividend of Rs. 3 per share.

Total outstanding hedges at the end of the quarter stood at $3.1 billion against $2.6 billion in the second quarter of 2008.

The company had been talking to its clients in the aftermath of the U.S. sub-prime crisis and they had not hinted on any IT budget cuts, TCS Chief Operating Officer N. Chandrasekaran said.

“We are pursuing 25 deals in the $50-100 million band in various geographies,” he said. This quarter, the company added 54 clients and bagged nine big deals of $50 million.

The banking, finance, services and insurance (BFSI) segment remained strong for TCS in the third quarter as well, Mr. Ramadorai said. TCS earned revenues of $1.5 billion in a single quarter, making it the ‘first Indian IT company’ in the process, he said.

Separately, the TCS board of directors approved a proposal to issue non-convertible redeemable preference shares up to Rs. 100 crore to its promoters Tata Sons. It is being done to meet some obligatory requirement overseas, TCS Chief Financial Officer S. Mahalingam said. “It is not a run up to the U.S. listing,” he said.

The company had hired 7,522 employees in the third quarter and was on track to meet the annual hiring plan of 32,500 in 2007-08, TCS Executive Director, HR, S. Padmanabhan said. — PTI

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