TCS net up 54%, may pay interim dividend

Tata Consultancy Services (TCS) announced a net profit of Rs 643.81 crore on a total income of Rs 2,219.86 crore, in the quarter ended December 2004 under Indian accounting standards. No comparable figures were quoted for the same period last year.

Under the US' Generally Accepted Accounting Principles, TCS reported 54.1 per cent growth in net profit to Rs 709.33 crore in the quarter, compared with Rs 460.47 crore in the corresponding period last year.

TCS' revenue went up by 38.2 per cent to Rs 2,578.43 crore for the quarter, against Rs 1,866.04 crore in the corresponding quarter last year. Earnings per share for the quarter stood at Rs 14.77.

Buoyed by its financial performance, the company has convened a board meeting on January 20 to consider an interim dividend.

Unveiling the results today, TCS Executive Vice-President Phiroz Vandrevala said the company continued to experience robust growth in all geographies and was well on its way to record revenues of $2 billion in the current financial year.

Vandrevala, however, refrained from providing any guidance for the rest of the year, saying the company would stay focused on its target. TCS, he explained, witnessed significant growth and expected to stay at the top of the industry.

The financial numbers failed to bring cheer to the TCS stock, which virtually closed flat at Rs 1,293.05 today on the Bombay Stock Exchange, compared with the previous close of Rs 1,297.20.

TCS has added 72 new clients and employed 2,733 during the quarter. The total number of employees stood at 43,681, in both overseas and Indian subsidiaries. Company officials said the attrition rate was 7.6 per cent for TCS and its overseas subsidiaries in the last 12 months.

TCS Chief Financial Officer S Mahalingam said as the company completed the transition towards large contracts, more business would move offshore. This, he said, had contributed to the improvement in margins.

Commenting on the impact of the appreciating rupee on the bottomline, Mahalingam said the rupee could strengthen further. "The company has to exercise phenomenal operational excellence to counter this," he said.