The Hindu : Business : TCS net at Rs. 1,291 crore

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Thursday, Jul 17, 2008
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TCS net at Rs. 1,291 crore

Special Correspondent

Declares interim dividend of Rs. 3 per equity share

— PHOTO: SHASHI ASHIWAL

CAUTIOUS OPTIMISM: S. Ramadorai (right), CEO and Managing Director, TCS, with N. Chandrasekaran, COO, addressing a press conference in Mumbai on Wednesday.

MUMBAI: Tata Consultancy Services (TCS) has reported a net profit of Rs. 1,290.61 crore for the first quarter of the current financial year, a growth of 7 per cent over Rs. 1,202.93 crore reported in the same quarter in the previous year. Revenues were up 24 per cent at Rs. 6,410.70 crore (Rs. 5,157.30 crore). Other income more than doubled to Rs. 119.64 crore.

The board of directors has declared an interim dividend of Rs. 3 per equity share.

The profit before interest and taxes was at Rs. 1,490.69 crore (Rs. 1,375.19 crore). The operating profit margin at 22.45 per cent was in line with the previous quarter and the company has undertaken pro-active cost control programme to maintain the operating margins.

According to S. Ramadorai, CEO and Managing Director, TCS, “we have been able to respond to the challenging macro environment and drive growth in the business under tough operating conditions and manage costs. TCS is cautiously optimistic about the rest of the year.”

S. Mahalingam, Chief Financial Officer and Executive Director, TCS, said, “TCS is focussed on extracting greater operational efficiencies through rigorous cost management programs that have helped us hold operating margins steady in the first quarter despite the impact of the annual wage increases during the quarter. All revenues in India are project based and cyclical with peaks in the fourth quarter and drops in the first quarter of the year.” The company’s losses due to foreign exchange operations were at Rs. 75.30 crore he added. “Our foreign exchange hedging programme is to protect our future earnings and is performing as desired. We look at it as an insurance programme and our hedging exposure remains unchanged at around $2 billion,” he said.

“Major markets, North America, the U.K. and Europe grew at eight per cent despite a challenging external scenario,” said N. Chandrasekaran, Chief Operating Officer and Executive Director, TCS. The company’s attrition rate in the quarter was 12.8 per cent overall with 12.1 per cent attrition rate in the IT services business and 20.5 per cent attrition rate in BPO. At the end of the first quarter, the total employee strength of the company was 116,308 from 64 nationalities. Foreign nationals formed 9.2 per cent of the total employee base and 29 per cent are women.

There was a gross addition of 8,982 employees, of which 4,495 were trainees and 2,905 were experienced professionals in India and 1,582 employees in overseas subsidiaries and branches in the first quarter.

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