TCS Reports Q3 Revenues of Rs. 7,277 Cr, Up 24.13 Pct
IT News Online Staff
2009-01-15
Tata Consultancy Services (TCS) has reported its consolidated financial results according to Indian GAAP for the third quarter ended December 31, 2008. The company posted revenues of Rs. 7,277 crore, an increase of 24.13% from the same period last year and 4.65% from the previous quarter.
Profit after tax for the quarter was Rs. 1,362 crore, up 2.68% from the third quarter of 2007 and 7.1% from the second quarter of 2008. Earning per share for the third quarter was Rs. 13.92. The company paid a quarterly dividend of Rs. 3 per share.
S. Ramadorai, Chief Executive Officer and Managing Director, TCS, said, "In tough market conditions, TCS continues to perform in a stellar fashion, driving revenue growth through our diversified market presence and boosting our operational profitability by conserving costs and creating efficiencies."
"In its 40-year history, TCS has focused on institution building and value creation for all stakeholders. We have paid dividends for 18 consecutive quarters. With our disciplined and professional approach to management, we have always been a role model for corporate governance highlighted by the company's transparency, ethics and integrity, values that flow from the Tata Group's Code of Conduct," added Ramadorai.
S. Mahalingam, Chief Financial Officer, said, "In the current environment, it is important to run a tight ship with cost control measures that can be sustained while continuing to invest for the future. We believe that the best course is to mitigate risks, move towards a sustainable and efficient cost base, continuously improve the collection process, and be prudent in cash and currency management."
"In a challenging market, TCS remained focused on execution discipline and kept pricing stable and therefore managed to grow profitably," said N. Chandrasekaran, Chief Operating Officer. "We have closed some key deals across markets and sectors, acquired 41 new customers and have a healthy pipeline of deals across our diversified customer going forward."
In terms of markets, TCS said North America appears to be stabilizing with the company adding two new marquee customers during the quarter. TCS' strong pan-European presence and category leadership in UK helped the company significantly grow revenues in a sluggish market.
Despite weak economic outlook, Latin America registered very strong demand, from both local companies and multinationals seeking GNDM capability. The Indian market continued to see low capital spend by both public and private sector clients. Going forward, the company said government spending is expected to revive demand.
TCS said consumer spending led sectors like Retail and Media and Entertainment exhibited resilience in the October-December quarter, while ramp-ups in large transformation deals signed in earlier quarters helped Retail and Life-Sciences verticals show strong growth.
Key wins in the third quarter of 2008:
- A large transformational full services (IT/IS/BPO) outsourcing deal for a leading specialty retailer of North America.
- A multi year deal from a leading U.S.-based Services company that will leverage GNDM and Full Services capabilities.
- Improve efficiency and drive optimization in the application portfolio for a leading US utility and bring innovation in their business.
- Multi year deal for prime application development and support for leading Canadian utility.
- Primary vendor for multi-million vendor consolidation initiative at a leading Investment Bank.
- Provide high quality and reliable case handling services to the clinical development group of a global pharma major.
"We have added over 30,400 people in the first nine months which is in line with our hiring plans for the financial year. Our retention rates for both IT services and BPO have shown significant improvement in the current quarter. We continue to focus on improving utilization rates and employee productivity," said Ajoy Mukherjee, Vice President and Head, Global Human Resources.
During the third quarter, there was a gross addition of 11,773 employees (net 8,692 employees) of which 8,704 were trainees and 1,696 were lateral recruits in India and 1,373 employees were added in overseas units and branches. The total employee base was 130,343 professionals and 52% of the workforce had more than three years experience.
The utilization rate (excluding trainees) was 79.9% and the attrition rate in the second quarter dropped to 11.9% overall with 11.2% attrition rate in the IT services business and 20.5% attrition rate in BPO. Foreign nationals formed 9.1% of the total employee base and 30% were women.
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