Financial Daily from THE HINDU group of publications
Saturday, Jul 16, 2005
Financial Daily from THE HINDU group of publications Saturday, Jul 16, 2005 |
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Financial Performance Info-Tech - Software Corporate Results - Software TCS posts 33 pc rise in Q1 net — Adds 68 clients; hires 2,690 people Our Bureau
Mr S. Ramadorai, Managing Director & CEO, TCS Ltd (right), and Mr S. Mahalingam, CFO, addressing a news conference in Mumbai on Friday. - Shashi Ashiwal
Mumbai , July 15 TATA Consultancy Services (TCS) has reported a net profit of Rs 578.86 crore for the first quarter ended June 30. The company's consolidated net profit, at Rs 630 crore, was 33 per cent higher, year-on-year, and 33.66 per cent higher, quarter-on-quarter, according to company officials at a press conference here on Friday. However, the corresponding figures for the previous year were not provided since TCS did not have any operating segment last year in the quarter ended June 30, 2004, said a statement from the company. The higher net profit was on account of increased international business, better employee utilisation and improved cost management, said Mr S. Ramadorai, CEO and MD, TCS. Consolidated revenues rose by 24.56 per cent, year-on-year, to Rs 2721 crore. Revenues from GE, the company's largest client, fell to 13 per cent of total revenues, down from 13.9 per cent, he said. Operating margins improved from 26.35 per cent to 27.38 per cent.
This was despite a pressure on costs, said Mr S. Mahalingam, Chief Financial Officer. The company has added 68 new clients during the quarter. The company hired 2,690 employees during the quarter under consideration.
Tata Infotech to be merged with TCS: Tata Infotech is set to be merged with TCS. Tata Infotech shareholders will get one share of TCS for every two shares held by them. The merger will be effective from April 1, 2005. The boards of both companies today gave their nod to the merger, which will be subject to formal approvals. The merger decision, which has been under deliberation for several months, has been designed keeping in mind value creation for customers, shareholders, and employees, said Mr Ramadorai. Tata Infotech is strong in systems integration, manufacturing, education and training, and engineering. Along with CMC, which is a 51 per cent subsidiary of TCS, this merger will help TCS become one of the most comprehensive end-to-end services provider in the industry, he said. Tata Infotech has several Fortune 500 clients. Its 3,600 employees will add to TCS's employee force of 43,682 as of June 2005. "In the future we will look at inorganic growth in addition to organic growth," said Mr Ramadorai. TCS has bagged several large projects; and outsourcing deals from the US and Europe are in the pipeline. "This will call for substantial ramping up of operations," he added. The independent valuation for the deal was done using a number of methods including projections, capabilities, synergies, and market value. Tata Infotech today closed at Rs 615.10 on the BSE.
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