Beating analyst expectations, India's largest IT services provider, Tata Consultancy Services (TCS), reported a net profit (consolidated Indian Generally Accepted Accounting Principles -- GAAP) of Rs 1,534 crore -- up 19 per cent year-on-year (YoY) for the first quarter ended June 30, 2009. Its revenue for the same period stood at Rs 7,207 crore -- up 12 per cent YoY.
The company's net profit was up 15 per cent sequentially (quarter-on-quarter or QoQ) while the revenue was up 0.5 per cent QoQ for the quarter under review. TCS, unlike its peers, does not provide guidance. The company incurred a foreign exchange loss of Rs 84.14 crore.
Growth was broad-based across markets and North America continued to maintain its share of revenues aided by semblance of stability in the Banking, Financial Services and Insurance (BFSI) verticals. In Europe, demand uptake from recently-acquired clients is helping sustain growth momentum and the pipeline remains strong, while demand from emerging markets is being driven by system integration and outsourcing engagements.
In terms of verticals, the quarter under review saw some stability in the core BFSI segment with the US leading the trend, while the UK and Europe are expected to stabilise in subsequent quarters, notes the management. In manufacturing, the speed of demand recovery will depend on overall economic recovery. The media and retail verticals continue to grow from new deals as well as ramp-ups of large deals closed in FY09.
Among service lines, application and outsourcing services continued to maintain revenue share despite slowdown in new deals. TCS’ remote infrastructure management solutions continue to attract good traction across markets. The company continues to leverage industry leading portfolio of BPO solutions to deliver growth.
The share of revenue from the Top 10 clients grew to 28 per cent of revenues from 26.8 per cent in the previous quarter and customers continued to migrate to higher revenue bands.
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Chief Executive Officer and Managing Director S Ramadorai said: “While we remain vigilant about the environment, TCS is leveraging its global presence and the investments made in developed and emerging markets to deliver our proposition of certainty, which resonates clearly with customers in these challenging times and helps us create long-term value for shareholders.”
Chief Operating Officer and Executive Director N Chandrasekaran said: “TCS’ discipline in execution and agility on the ground as well as its ability to remain close to the customer has enabled us to deliver volume growth with enhanced profitability in this quarter."
On the hiring front, utilisation in Q1 FY09 was 79.2 per cent (excluding trainees) and 71.3 per cent (including trainees). There was a gross addition of 2,828. The attrition rate in Q1 was 11.5 per cent. At the end of Q1, the total employee strength of the company was 1,41,642. Foreign nationals formed 8.3 per cent of the total employee base and 30 per cent were women.
"We remain on track for our graduate hiring programme in 2009-10," noted Ajoy Mukherjee, vice-president, head of global human resources, TCS.