TCS net profit up 5.6% at Rs 679.65 crore

Tata Consultancy Services (TCS), the country's largest software company, has posted a 5.6 per cent increase in its net profit at Rs 679.65 crore in the quarter ended December 2005 compared with the previous corresponding quarter's Rs 643.81 crore.

Income from operations during the period grew by 29.56 per cent to Rs 2,720.19 crore from Rs 2,099.56 crore and total income grew by 22.58 per cent to Rs 2,727.93 crore from Rs 2,225.26 crore.

Profit before tax and exceptional items rose 5.69 per cent to Rs 767.99 crore from Rs 726.59 crore. TCS announced an interim dividend of Rs 3 per share. The earnings per share (EPS) stood at Rs 14.16 at the end of the December quarter, compared with 13.41 in the corresponding previous year.

TCS Chief Financial Officer S Mahalingam said the previous year quarter included a huge foreign exchange-related hedging gain.

On a consolidated basis, the IT major posted a total income of Rs 3,302.54 crore, 22.45 per cent higher than the previous corresponding quarter's Rs 2,696.86 crore while net profit rose 5.57 per cent to Rs 753.08 crore (Rs 713.31 crore).

During the first nine months of the year, TCS posted revenue of $2 billion ($2.2 billion in the whole of the last financial year), driven by a growth across regions and key verticals.

"We have recorded $2 billion in revenues in the year-to-date. This is banking on the fact that we have emerged as a full-services player in the industry and laid a strong foundation for future growth on the back of key customer wins we had during the earlier quarter," TCS MD and CEO S Ramadorai said.

The TCS stock bucked a weak Mumbai market trend today. It rose 0.4 per cent to Rs 1,678.25 over yesterday's close of Rs 1671.65 and recovered from an early fall triggered by valuation concerns over rival Infosys.

It added 83 new customers during the quarter, while 7,348 associates joined the company. The Tata group company is also planning to add 8,000 employees in its fourth quarter, of which 3,500 would be through recruitment and 4,000 through acquisitions, Ramadorai said.

TCS has appointed Harvard Professor Clayton M Christensen as an independent director on its board.

Some of the large TCS deals since July include a $100 million contract from a financial services client, a $250 million contract from ABN Amro, a $250 million order from Tata Teleservices and a deal that has a potential of $848 million in revenue over 12 years from British insurance firm Pearl Group.