TCS growth rate accelerates in Q2

H1 Revenues at Rs 10,843 cr ($2.7b) up 25.3% Y-o-Y

H1 Net Profit at Rs 2,455 cr ($ 610m) up 29% Y-o-Y

Q2 Revenues at Rs 5,640 cr ($ 1.42b); up 25.4% Y-o-Y,

Q-o-Q Revenues: Up 8.4% in Re terms; up 10.8% in $ terms

Q2 Net Profit at Rs 1,252 cr ($ 314m) up 22.8% Y-on-Y

Q-o-Q Net Profits: Up 4.1% in Re terms; up 6.3% in $ terms

Full Services Play: Over 50% of Q2 revenues from new services

First India-based IT firm to cross landmark of 100,000 employees

NEW DELHI, October 15, 2007: Tata Consultancy Services (BSE: TCS.BO, NSE: TCS.NS) reported its consolidated financial results according to Indian GAAP for the quarter ended September 30, 2007.

Highlights for Quarter Ended September 30, 2007

EPS at Rs 12.79 in Q2

51 new clients added in Q2

12,523 employees joined the company in Q2

Attrition steady at 11.5% LTM (including BPO)

Quarterly dividend of Rs 3 per share

Chief Executive Officer and Managing Director, S. Ramadorai said: We have underlined our leadership position by earning revenues of $2.7 billion during the first half of this financial year by accelerating our growth rate and improving our profitability in Q2." He added: Our strategic investments in new services like consulting, infrastructure and platform-based BPO as well as new markets are helping accelerate growth and diversify our revenue base, thereby reinforcing our full service capability.

S. Mahalingam, Chief Financial Officer, said: Our focus remains on twin pillars of growth and profitability. In Q2, we have absorbed the impact of the rupee appreciation and improved our profitability. We remain confident that our hedging program and cost management levers will help us expand margins during the rest of the year.

TCS continued to drive its program of long-term financial management with a strong focus on countering the impact of the appreciating Indian rupee and keeping a strong handle on costs. As at the end of Q2, TCS had about $2.6 billion outstanding in hedges. In addition, it continues to drive margin expansion through rate and productivity efficiencies and a movement of work off-shore.

"This has been a landmark quarter with our full services strategy coming of age and more than 50% of the revenue in Q2 coming from non-ADM services including consulting, BPO and infrastructure services, which are all growing at double digit rates," said N. Chandrasekaran, Chief Operating Officer. "In terms of markets, our full services play is driving strong growth in North America and there is strong deal flow in UK and Europe across financial services, technology, and transportation sectors."

In dollar terms, TCS revenues grew by 10.8% during Q2 driven by strong growth in banking and financial services, telecom and manufacturing verticals, which grew faster than the average company growth rate. Travel and hospitality is also fast emerging as a key vertical contributing 4.4% of revenues, up from 2.8% in Q1 as a result of significant client additions.

"We remain on target to meet our annual hiring plans and have added over 12,000 employees during Q2," said S. Padmanabhan, Executive Director, Human Resources "Our ability to keep the attrition rate stable underscores our robust employee management programs to look after the welfare and global career aspirations of our 100,000-strong employee base.

During Q2, TCS became the first Indian IT company to cross the 100,000 employee-mark. There was a gross addition of 12,523 employees in Q2 of which 5,899 were trainees and 5,658 were lateral recruits in India. The net addition of employees was 9,268. TCS also added 966 employees in overseas subsidiaries and branches.

TCS' attrition rate in Q2 remained steady at 11.5% overall with 10.9% attrition rate in the IT services business and 17.9% attrition rate in BPO. Foreign nationals formed 8.5% of the total employee base and 28% were women.

Phiroz Vandrevala, Executive Director, Corporate Affairs said: Our global branding campaign around the theme of Experience Certainty continues to be recognized and resonate among our customers, prospects and partners and is helping create a leadership position for us globally.

(INR numbers of Q2 FY08 are converted to USD on convenience translation basis @ Rupees 39.843 per USD)

About Tata Consultancy Services Ltd (TCS): Tata Consultancy Services is an IT services, business solutions and outsourcing organization that delivers real results to global businesses, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled services delivered through its unique Global Network Delivery Model, recognized as the benchmark of excellence in software development.

A part of the Tata Group, India's largest industrial conglomerate, TCS has over 100,000 of the world's best trained IT consultants in 47 countries. The Company generated consolidated revenues of US $4.3 billion for fiscal year ended 31 March, 2007 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at www.tcs.com.