The Hindu Business Line : TCS net moves up to Rs 694 cr

TATA Consultancy Services (TCS) has reported a net profit of Rs 693.71 crore for the quarter ended September 30, 2005, against Rs 574.76 crore in the year-ago period.

The strong performance came on the back of a 22 per cent growth in its total sales for the period at Rs 2,982.60 crore (Rs 2,448.02 crore). Of the total income, Rs 2,774 crore was reported (Rs 2,319 crore) from its core activity of information technology and consultancy services.

During the period, the US continued to be the major revenue earner, accounting for 59.7 per cent of the revenue, followed by Europe 21.8 per cent, and India at 12.6 per cent.

Mr S. Ramadorai, Chairman of TCS, termed it an "outstanding operational performance," and said that he was happy to report a "double-digit quarter-on-quarter growth" both for topline and bottomline, referring to the growth over the first quarter (April-June 2005) during the fiscal.

"The significant client acquisitions we have had in the previous quarters have resulted in excellent ramp-up and growth during the quarter. TCS's global delivery-cum-consulting led growth strategy has gained full market validation with the number of significant wins we have had this quarter. Our ability to manage complex technology engagements on a global scale will continue to be a great growth driver," Mr Ramadorai said.

TCS bagged a number of big `wins' during the quarter, including a $250-million engagement with ABN Amro, and a similar sized operations and applications engagement from group company Tata Teleservices.

Both have a committed revenue span of five years, but come with varying revenue maturing models.

"The ABN Amro project will see revenues peak during the second and third years, while it will be at its maximum during the second, third and fourth years. There are a number of more large-sized deals, including one of $35 million from a multi-national bank in South America; we have added 74 clients during the period," he said. The company saw net addition of 4,224 hands during the quarter, and plans to add another 3,500 during the next quarter through the organic side. It is also set to accommodate another 3,500 hands through the Tata Infotech merger, and another 650 employees from other two subsidiaries. At present, the total employee strength is at 53,329 with non-Indians accounting for almost four per cent. The TCS employee attrition level is at 8.7 per cent, the company having budgeted for eight to nine per cent attrition.

"It is about managing attrition. We have accounted for higher training and hiring costs. Our women employees account for 23 per cent of total strength, while over 50 per cent of our employees have work experience of three years or more," Mr Ramadorai said.

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