Country’s largest information technology (IT) company, Tata Consultancy Services (TCS) reported a staggering 50.3 per cent rise in its net profit for the third quarter (Q3) of the current fiscal.
Driven by strong business from manufacturing, retail & pharmaceutical and banking segments and drastic improvements from European order book, company’s net profit rose to Rs 5,333.43 crore against Rs 3,549.62 crore in Q3 FY13.
IT services major’s revenue also surged by 32.5 per cent to Rs 21,294 crore in Q3 FY14 as compared to Rs 16,070 crore in the same quarter last fiscal. On quarter-on-quarter (QoQ) basis, TCS net profit rose by 15.1 per cent and revenues were up marginally by 1.5 per cent.
Calling Q3 results as a “very good one”, TCS’s Managing Director and CEO, N Chandrasekaran said, “Strong international demand for our services and discipline in execution has helped TCS maintain its momentum and post robust growth in volumes as well as realization.”
He further added that the company signed eight large deals in the quarter but was not so optimistic about the domestic market till June or September. He also described the margins above their estimate of 27 per cent and attributed the good numbers to lower forex losses.
Company reported a growth of over 36 per cent on year-on-year (YoY) basis in its manufacturing and retail & consumer packaged goods industry to Rs 1,864.13 crore and Rs 2,935.53 crore respectively. Company’s banking segment also grew by 31.4 per cent to Rs 9,091.22 crore.
International business grew by 3.8 per cent in dollar terms, Chandrasekaran said, adding that attrition stood at 10.9 per cent during the quarter. The diversified market presence and services portfolio has helped the company overcome seasonal weakness and soft demand in the Indian market, he added.
In US dollar terms, net income rose by 31.7 per cent to $858 million in the third quarter of the current fiscal against $ 652 million in previous fiscal, while revenues were up by 17 per cent to $ 3.44 billion against $ 2.95 billion during the same period.
Sequentially in dollar terms, net profit rose by 14.7 per cent and revenues were up by 3 per cent. “Growth in Q3 was driven by industries like life Science & Healthcare, Manufacturing, Media, Travel & Hospitality and Telecom. The company’s broad based presence across markets and services helped overcome seasonal weakness in some markets. Europe led growth, driven by the continuous investments being made in that market, while North America and UK also grew during the quarter,” TCS CFO Rajesh Gopinathan said.