Tata Consultancy net profit up 29 per cent in Q2 2009-10

Tata Consultancy Services Ltd, the country's largest software services exporting company, today reported a 29.2 per cent year-on-year rise in its consolidated net profit for July-September 2009-10, at Rs1,642 crore. Consolidated revenues rose 6.9 per cent to Rs7,435 crore year-on-year.

On a quarter-on-quarter basis, TCS's revenue for the second quarter of the current financial year was up 3.2 per cent while net profit was up 7.1 per cent.

TCS also announced a quarterly dividend of Rs2 per share, taking the earnings per share in the second quarter to Rs8.38 a share.

TCS said it added 30 new clients in the July-September 2009 period while 5,530 employees joined the company during the quarter. The attrition level (including BPO) was at around 11.4 per cent, TCS said in its release.
 
"TCS has delivered a sterling performance during the quarter. We are seeing an improvement in market conditions. With our client budgets still being tightly managed, we continue to deliver higher value to customers, deepening our relationships and focusing on superior operational management," said CEO and MD, N Chandrasekaran. "The investments made by TCS in its market footprint and its full services offerings holds us in good stead to capitalise on emerging growth opportunities," he added.
 
"We have focused on all round cost optimisation and our sustained emphasis on operational efficiency is resulting in continuous margin improvements and financial strength. Our growth across markets indicates that TCS is successfully leveraging the sales and other infrastructure it has created to deliver higher growth and profits," said S Mahalingam, chief financial officer. "With the Indian rupee and major global currencies continuing to experience sharp movements, we are monitoring our foreign exchange exposure closely and making adjustments wherever required," he added.
 
TCS saw its overseas business, including in the US, grow 5.3 per cent sequentially, in rupee terms. In the UK, the company secured business in the public sector, energy and retail sector despite the continued weakness in the economy.

Among emerging markets, Latin America and Asia Pacific continue to show growth rates that are above the company average, the release said.
 
Among verticals, TCS said the BFSI segment continued to perform strongly, leading recovery across geographies, while the life science, and energy and utilities verticals recorded better than average growth with visible traction in all major markets.
 
In terms of service lines, the strong demand for application development and maintenance services continued, while the BPO and assurance services continued to gather steam, it said.

"Given the strong performance during the quarter, we have decided to pay 150 per cent of the quarterly component of the variable pay this quarter, applicable for all eligible employees on India payroll.  In order to ensure that we have resources to participate in the recovery, we plan to add 8,000 new professionals in the October-December quarter," said Ajoy Mukherjee, vice president, head, global human resources.