Backed by heavy rupee depreciation and robust order book, country’s premier information technology company, Tata Consultancy Services (TCS) on Tuesday reported 35 per cent jump in its second quarter results. The company’s net profit jumped by 35 per cent to Rs4,633.33 crore as compared to Rs3,434.37 crore during the same quarter last year.
The total revenue also grew by 34.29 per cent to Rs20,977.24 crore from Rs15,260.75 crore in the corresponding quarter last fiscal. With the orders from US improving, the company registered the highest volume growth in the last nine quarters to 7.4 per cent.
Commenting on the quarterly results, company’s CEO and MD, N Chandrasekaran said in a statement, “We continue to see a robust demand pipeline across markets and a unique opportunity to strategically partner and participate with clients as they reimaging their future in multiple dimensions.”
Company reported good demand from all core geographies especially Europe, North America and the United Kingdom. Banking, Financial Services and Insurance (BFSE) and manufacturing verticals led the growth. “We have demonstrated all-round strong growth across markets and industries highlighted by efficient and rigorous execution,” Chandrasekaran added.
The company also reported the addition of three new $ 100 million clients and the operating margins for the quarter stood at 30.1 per cent mainly due to the sharp weakness in the domestic currency against dollar.
“Strong volumes, currency tail winds and firm execution helped us post industry leading operating margins in this quarter,” TCS CFO Rajesh Gopinathan said.
As on September 30, 2013, the company holds cash of Rs3,346.86 crore. He further added that the company has signed eight large deals, including two each in BFSI and telecom segments, during the quarter.
In dollar terms, consolidated profit grew by 16.4 per cent year-on-year to $748 million and revenues rose by 17 per cent to $ 3.34 billion. The EBIT margin of TCS grew by 315 basis points or 3.15 per cent to 30.2 per cent.
Commenting on the results, Ankita Somani, Research Analyst (IT), Angel Broking said: “TCS yet again reported robust set of results for Q2, FY2014 ... Volume growth was whopping at 7.3 per cent quarter-on-quarter (highest in last eight quarters).”
The EBIT margin of TCS grew by 315 basis points (3.15 per cent) to 30.2 per cent, largely aided by sharp rupee depreciation, she said.
“With this level of operating margin, now the margin gap between TCS and Infosys have widened by more than 600 basis points,” she added.
Country’s biggest IT services exporter also added that they would continue with their plan of adding 45,000 to 50,000 employees in this financial year.