 "Employee bonus pulls down TCS profit by 27%")
According to International Financial Reporting Standards figures, the company reported a net profit of Rs 3,858 crore for the March quarter, down 27 per cent on an annual basis and 29 per cent in sequential terms. If the cumulative bonus payout of Rs 2,628 crore to employees isn’t factored in, profit for the quarter stands at Rs 5,905.9 crore, growth of 11.5 per cent annually and 8.5 per cent sequentially.
Revenue for the quarter was Rs 24,219 crore, up 12.4 per cent on a year-on-year basis and a fall of 1.1 per cent sequentially. In dollar terms, revenue grew 1.6 per cent on a constant currency basis.
The company announced salary increases, effective April. For India, the average salary increase is eight per cent; it is two-four per cent for the company’s staff abroad.
The management’s commentary on FY16 growth was positive. “We see two trends emerging for FY16. One, clients across the board are increasing their digital spends and two, simplification initiatives will continue to drive in FY16. We stay positive on all verticals for FY16. We are well poised for another year of good growth in FY16,” said Managing Director and Chief Executive Officer N Chandrasekaran, while addressing an analyst call.
He, however, cautioned spending in the telecom and energy segments would be subdued but said the company would be able to better the Nasscom-projected growth rates for the sector. “We have always said we will be ahead of market estimates. If you take the geographies we are present in, we see growth across the board,” he said.
Nasscom has said growth in the information technology sector for FY16 will be 12-14 per cent.
For the first time, the company announced annual revenue from its cloud platforms, which stood at $125 million. “These numbers represent just the cloud platforms TCS has invested in through the past few years. This is not the revenue break-up for our digital platform. It is from all the cloud products TCS has developed. It is growth of 55 per cent on an annual basis,” said Chandrasekaran.
For 2014-15, TCS’ profit rose 2.7 per cent to Rs 19,648.4 crore, while revenue increased 15.7 per cent to Rs 94,648.4 crore. Adjusted for bonus, the net profit stood at Rs 21,696 crore, up 13.5 per cent.
Client additions were strong, with the $100-million revenue band increasing by four, $50-million by three and $20-million by three.
Currency headwinds led to a 270-basis-point hit on dollar revenue. Rajesh Gopinathan, chief financial officer, said: “We have maintained our profitability in a challenging operating environment, in which currency has been a strong headwind for some time. Despite these and other macro challenges, our goal has been to support business growth, while ensuring we continue to invest in a calibrated fashion for the future.”
During the March quarter, TCS added 19,192 employees, taking its overall headcount to 319,656. The company said its attrition rate of 14.9 per cent had risen. “During FY15, we trained and integrated about 67,000 professionals…with business demand continuing to be robust, we have made 25,000 offers at engineering campuses to trainees, who will join us from the second quarter of the new financial year,” said Ajoy Mukherjee, executive vice-president and head (global human resources).